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| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1171 Introduced 2/5/2019, by Sen. Laura Ellman SYNOPSIS AS INTRODUCED:
| | 220 ILCS 5/8-403.1 | from Ch. 111 2/3, par. 8-403.1 |
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Amends the Public Utilities Act. Makes a technical change in a Section
concerning tax credits related to qualified solid waste energy facilities.
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| | A BILL FOR |
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1 | | AN ACT concerning regulation.
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2 | | Be it enacted by the People of the State of Illinois, |
3 | | represented in the General Assembly:
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4 | | Section 5. The Public Utilities Act is amended by changing |
5 | | Section 8-403.1 as follows:
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6 | | (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
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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
the policy of this |
11 | | State to encourage the
development of alternate energy |
12 | | production facilities in order to conserve our
energy resources |
13 | | and to 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.
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22 | | (c) In furtherance of the policy declared in this Section, |
23 | | the
Illinois Commerce Commission shall require electric |
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1 | | utilities to enter into
long-term contracts to purchase |
2 | | electricity from qualified solid waste
energy facilities |
3 | | located in the electric utility's service area, for a
period |
4 | | beginning on the date that the facility begins generating
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5 | | electricity and having a duration of not less than 10 years
in |
6 | | the case of facilities fueled by landfill-generated methane, or |
7 | | 20
years in the case of facilities fueled by methane generated |
8 | | from a landfill
owned by a forest preserve district. The |
9 | | purchase rate contained in such
contracts shall be equal to the |
10 | | average amount per kilowatt-hour paid from
time to time by the |
11 | | unit or units of local government in which the
electricity |
12 | | generating facilities are located, excluding amounts paid for
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13 | | street lighting and pumping service.
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14 | | (d) Whenever a public utility is required to purchase |
15 | | electricity
pursuant to subsection (c) above, it shall be |
16 | | entitled to credits in
respect of its obligations to remit to |
17 | | the State taxes it has
collected under the Electricity Excise |
18 | | Tax Law equal to the amounts,
if any, by which payments for |
19 | | such electricity
exceed (i) the then current rate at which the |
20 | | utility must purchase the
output of qualified facilities |
21 | | pursuant to the federal Public
Utility Regulatory Policies Act |
22 | | of 1978, less (ii) any costs, expenses, losses,
damages or |
23 | | other amounts incurred by the utility, or for which it becomes
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24 | | liable, arising out of its failure to obtain such electricity |
25 | | from such other
sources. The amount of any such
credit shall, |
26 | | in the first instance, be
determined by the utility, which |
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1 | | shall make a monthly report of such credits
to the Illinois |
2 | | Commerce Commission and, on its monthly tax return, to the
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3 | | Illinois Department of Revenue. Under no circumstances shall a |
4 | | utility be
required to purchase electricity from a qualified |
5 | | solid waste energy facility
at the rate prescribed in |
6 | | subsection (c) of this Section if such purchase would
result in |
7 | | estimated tax credits that exceed, on a monthly basis, the |
8 | | utility's
estimated obligation to remit to the State taxes it |
9 | | has
collected under the Electricity Excise Tax Law. The
owner |
10 | | or operator shall negotiate facility operating conditions with |
11 | | the
purchasing utility in accordance with that utility's posted |
12 | | standard terms and
conditions for small power producers. If the |
13 | | Department of Revenue disputes the
amount of any such credit, |
14 | | such dispute shall be decided by the Illinois
Commerce |
15 | | Commission. Whenever a qualified solid waste energy facility |
16 | | has paid
or otherwise
satisfied in full the capital costs or |
17 | | indebtedness incurred in developing
and implementing the |
18 | | qualified solid waste energy facility, whenever the qualified |
19 | | solid waste energy facility ceases to operate and produce |
20 | | electricity from methane gas generated from landfills, or at |
21 | | the end of the contract entered into pursuant to subsection (c) |
22 | | of this Section, whichever occurs first, the qualified solid |
23 | | waste energy facility shall
reimburse the Public Utility Fund |
24 | | and the General Revenue
Fund in the State treasury for the |
25 | | actual
reduction in payments to those Funds caused by this
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26 | | subsection (d) in a
manner to be determined by the Illinois |
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1 | | Commerce Commission and based on
the manner in which revenues |
2 | | for those Funds were reduced. The payments shall be made to the |
3 | | Illinois Commerce Commission, which shall determine the |
4 | | appropriate disbursements to the Public Utility Fund and the |
5 | | General Revenue Fund based on this subsection (d).
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6 | | (e) The Illinois Commerce Commission shall not require an |
7 | | electric
utility to purchase electricity from any qualified |
8 | | solid waste energy facility
which is owned or operated by
an |
9 | | entity that is primarily engaged in the
business of producing |
10 | | or selling electricity, gas, or useful thermal energy
from a |
11 | | source other than one or more qualified solid waste energy |
12 | | facilities.
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13 | | (e-5) A qualified solid waste energy facility may receive |
14 | | the purchase rate provided in subsection (c) of this Section |
15 | | only for kilowatt-hours generated by the use of methane
gas |
16 | | generated from landfills. The purchase rate provided in |
17 | | subsection (c) of this Section does not apply to electricity |
18 | | generated by the use of a fuel that is not methane gas |
19 | | generated from landfills. If the Illinois Commerce Commission |
20 | | determines that a qualified solid waste energy facility has |
21 | | violated the requirement regarding the use of methane gas |
22 | | generated from a landfill as set forth in this subsection |
23 | | (e-5), then the Commission shall issue an order requiring that |
24 | | the qualified solid waste energy facility repay the State for |
25 | | all dollar amounts of electricity sales that are determined by |
26 | | the Commission to be the result of the violation. As part of |
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1 | | that order, the Commission shall have the authority to revoke |
2 | | the facility's approval to act as a qualified solid waste |
3 | | energy facility granted by the Commission under this Section. |
4 | | If the amount owed by the qualified solid waste energy facility |
5 | | is not received by the Commission within 90 days after the date |
6 | | of the Commission's order that requires repayment, then the |
7 | | Commission shall issue an order that revokes the facility's |
8 | | approval to act as a qualified solid waste energy facility |
9 | | granted by the Commission under this Section. The Commission's |
10 | | action that vacates prior qualified solid waste energy facility |
11 | | approval does not excuse the repayment to the State treasury |
12 | | required by subsection (d) of this Section for utility tax |
13 | | credits accumulated up to the time of the Commission's action.
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14 | | A qualified solid waste energy facility must receive Commission |
15 | | approval before it may use any fuel in addition to methane gas |
16 | | generated from a landfill in order to generate electricity. If |
17 | | a qualified solid waste energy facility petitions the |
18 | | Commission to use any fuel in addition to methane gas generated |
19 | | from a landfill to generate electricity, then the Commission |
20 | | shall have the authority to do the following: |
21 | | (1) establish the methodology for determining the |
22 | | amount of electricity that is generated by the use of |
23 | | methane gas generated from a landfill and the amount that |
24 | | is generated by the use of other fuel; |
25 | | (2) determine all reporting requirements for the |
26 | | qualified solid waste energy facility that are necessary |
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1 | | for the Commission to determine the amount of electricity |
2 | | that is generated by the use of methane gas from a landfill |
3 | | and the amount that is generated by the use of other fuel |
4 | | and the resulting payments to the qualified solid waste |
5 | | energy facility; and |
6 | | (3) require that the qualified solid waste energy |
7 | | facility, at the qualified solid waste energy facility's |
8 | | expense, install metering equipment that the Commission |
9 | | determines is necessary to enforce compliance with this |
10 | | subsection (e-5). |
11 | | A public utility that is required to enter into a long-term |
12 | | purchase contract with a qualified solid waste energy facility |
13 | | has no duty to determine whether the electricity being |
14 | | purchased was generated by the use of methane gas generated |
15 | | from a landfill or was generated by the use of some other fuel |
16 | | in violation of the requirements of this subsection (e-5).
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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.
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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 purchased
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1 | | within the State of Illinois, to the extent possible, and (2) |
2 | | electric
utilities report annually to the Commission on the |
3 | | extent of such
displacements.
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4 | | (h) Nothing in this Section is intended to cause an |
5 | | electric utility
that is required to purchase power hereunder |
6 | | to incur any economic loss as
a result of its purchase. All |
7 | | amounts paid for power which a utility is
required to purchase |
8 | | pursuant to subparagraph (c) shall be deemed to be
costs |
9 | | prudently incurred for purposes of computing charges under |
10 | | rates
authorized by Section 9-220 of this Act. Tax credits |
11 | | provided for herein
shall be reflected in charges made pursuant |
12 | | to rates so authorized to the
extent such credits are based |
13 | | upon a cost which is also reflected in such
charges.
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14 | | (i) Beginning in February 1999 and through January 2013, |
15 | | each qualified
solid waste energy facility that sells |
16 | | electricity to an electric utility at
the purchase rate |
17 | | described in subsection (c) shall file with the Department
of |
18 | | Revenue on or before the 15th of each month a form, prescribed |
19 | | by the
Department of Revenue, that states the number of |
20 | | kilowatt hours of electricity
for which payment was received at |
21 | | that purchase rate from electric utilities
in Illinois during |
22 | | the immediately
preceding month. This form shall be accompanied |
23 | | by a payment from the
qualified solid waste energy facility in |
24 | | an amount equal to six-tenths of a
mill ($0.0006) per kilowatt |
25 | | hour of electricity stated on the form. Beginning
on the |
26 | | effective date of this amendatory Act of the 92nd General
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1 | | Assembly, a qualified solid waste energy facility must file the |
2 | | form required
under this subsection (i) before the 15th of each |
3 | | month regardless of whether
the facility received any payment |
4 | | in the previous month. Payments received by
the Department of |
5 | | Revenue shall be deposited into the Municipal Economic
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6 | | Development Fund, a trust fund created outside the State |
7 | | treasury.
The State Treasurer may invest the moneys in the Fund |
8 | | in any investment
authorized by the Public Funds Investment |
9 | | Act, and investment income shall be
deposited into and become |
10 | | part of the Fund. Moneys in the Fund shall be used
by the State |
11 | | Treasurer as provided in subsection (j). |
12 | | Beginning on July 1, 2006 through January 31, 2013, each |
13 | | month the State Treasurer shall certify the following to the |
14 | | State Comptroller: |
15 | | (A) the amount received by the Department of Revenue |
16 | | under this subsection (i) during the immediately preceding |
17 | | month; and |
18 | | (B) the amount received by the Department of Revenue |
19 | | under this subsection (i) in the corresponding month in |
20 | | calendar year 2002. |
21 | | As soon as practicable after receiving the certification from |
22 | | the State Treasurer, the State Comptroller shall transfer from |
23 | | the General Revenue Fund to the Municipal Economic Development |
24 | | Fund in the State treasury an amount equal to the amount by |
25 | | which the amount calculated under item (B) of this paragraph |
26 | | exceeds the amount calculated under item (A) of this paragraph, |
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1 | | if any.
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2 | | The obligation of a
qualified solid waste energy facility |
3 | | to make payments into the Municipal
Economic Development Fund |
4 | | shall terminate upon either: (1) expiration or
termination of a |
5 | | facility's contract to sell electricity to an electric
utility |
6 | | at the purchase rate described in subsection (c); or (2) entry
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7 | | of an enforceable, final, and non-appealable order by a court |
8 | | of competent
jurisdiction that Public Act 89-448 is invalid. |
9 | | Payments by a
qualified solid waste energy facility into the |
10 | | Municipal Economic Development
Fund do not relieve the |
11 | | qualified solid waste energy facility of its
obligation to |
12 | | reimburse the Public Utility Fund and the General Revenue Fund
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13 | | for the actual reduction in payments
to those Funds as a result |
14 | | of credits received by electric utilities under
subsection (d).
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15 | | A qualified solid waste energy facility that fails to |
16 | | timely file the
requisite form and payment as required by this |
17 | | subsection (i) shall be subject
to penalties and interest in |
18 | | conformance with the provisions of the Illinois
Uniform Penalty |
19 | | and Interest Act.
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20 | | Every qualified solid waste energy facility subject to the |
21 | | provisions of this
subsection (i) shall keep and maintain |
22 | | records and books of its sales pursuant
to subsection (c), |
23 | | including payments received from those sales and the
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24 | | corresponding tax payments made in accordance with this |
25 | | subsection (i), and for
purposes of enforcement of this |
26 | | subsection (i) all such books and records shall
be subject to |
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1 | | inspection by the Department of Revenue or its duly authorized
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2 | | agents or employees.
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3 | | When a qualified solid waste energy facility fails to file |
4 | | the form or make
the payment required under this subsection |
5 | | (i), the Department of Revenue, to
the extent that it is |
6 | | practical, may enforce the payment obligation in a manner
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7 | | consistent with Section 5 of the Retailers' Occupation Tax Act, |
8 | | and if
necessary may impose and enforce a tax lien in a manner |
9 | | consistent with
Sections 5a, 5b, 5c, 5d, 5e, 5f,
5g, and 5i of |
10 | | the Retailers' Occupation Tax Act. No tax lien may be imposed
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11 | | or enforced, however, unless a qualified solid waste energy |
12 | | facility fails to
make the payment required under this |
13 | | subsection (i). Only to the extent
necessary and for the |
14 | | purpose of enforcing this subsection (i), the Department
of |
15 | | Revenue may secure necessary information from a qualified solid |
16 | | waste energy
facility in a manner consistent with Section 10 of
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17 | | the Retailers' Occupation Tax Act.
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18 | | All information received by the Department of Revenue in |
19 | | its administration
and enforcement of this subsection (i) shall |
20 | | be confidential in a manner
consistent with Section 11 of the |
21 | | Retailers' Occupation Tax Act. The
Department of Revenue may |
22 | | adopt rules to implement the provisions of this
subsection (i).
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23 | | For purposes of implementing the maximum aggregate |
24 | | distribution provisions in
subsections (j) and (k), when a |
25 | | qualified solid waste energy facility makes a
late payment to |
26 | | the Department of Revenue for deposit into the Municipal
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1 | | Economic Development Fund, that payment and deposit shall be |
2 | | attributed to the
month and corresponding quarter in which the |
3 | | payment should have been made, and
the Treasurer shall make |
4 | | retroactive distributions or refunds, as the case may
be, |
5 | | whenever such late payments so require.
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6 | | (j) The State Treasurer, without appropriation, must make |
7 | | distributions
immediately after January 15, April 15, July 15, |
8 | | and October 15 of each
year, up to maximum aggregate |
9 | | distributions of $500,000 for the distributions
made in the 4 |
10 | | quarters beginning with the April distribution and ending with
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11 | | the January distribution,
from the Municipal Economic |
12 | | Development Fund to each city, village, or
incorporated town |
13 | | located in Cook County that has approved construction within |
14 | | its boundaries of an incinerator
that will burn recovered wood |
15 | | processed for fuel to generate electricity and will commence |
16 | | operation after 2009. Total distributions in the
aggregate to |
17 | | all qualified cities, villages, and incorporated towns in the 4
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18 | | quarters beginning with the April distribution and ending with |
19 | | the January
distribution shall not exceed $500,000. The amount
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20 | | of each distribution shall be determined pro rata based on the |
21 | | population of
the city, village, or incorporated town compared |
22 | | to the total population of all
cities, villages, and |
23 | | incorporated towns eligible to receive a distribution.
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24 | | Distributions received by a city, village, or incorporated town |
25 | | must be held in
a separate account and may
be used only to |
26 | | promote and enhance industrial, commercial, residential,
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1 | | service, transportation, and recreational activities and |
2 | | facilities within its
boundaries, thereby enhancing the |
3 | | employment opportunities, public health and
general welfare, |
4 | | and
economic development within the community, including |
5 | | administrative
expenditures exclusively to further these |
6 | | activities. Distributions may also be used for cleanup of open |
7 | | dumping from vacant properties and the removal of structures |
8 | | condemned by the city, village, or incorporated town. These
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9 | | funds, however, shall not be used by the city, village, or |
10 | | incorporated town,
directly or
indirectly, to purchase, lease, |
11 | | operate, or in any way subsidize the operation
of any |
12 | | incinerator, and these funds shall not be paid, directly
or |
13 | | indirectly, by the city, village, or incorporated town to the |
14 | | owner,
operator, lessee, shareholder, or bondholder of any |
15 | | incinerator.
Moreover, these funds shall not be used to pay |
16 | | attorneys fees in any litigation
relating to the validity of |
17 | | Public Act 89-448. Nothing in
this Section prevents a city, |
18 | | village, or incorporated town from using other
corporate funds |
19 | | for any legitimate purpose. For purposes of this subsection,
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20 | | the term "municipal waste" has the meaning ascribed to it in |
21 | | Section 3.290 of the Environmental Protection Act.
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22 | | (k) If maximum aggregate distributions of $500,000 under |
23 | | subsection (j)
have been made after the January distribution |
24 | | from the Municipal Economic
Development Fund, then the balance |
25 | | in the Fund shall be refunded to the
qualified
solid waste |
26 | | energy facilities that made payments that were deposited into |
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1 | | the
Fund during the previous 12-month period. The refunds shall |
2 | | be prorated based
upon the facility's payments in relation to |
3 | | total payments for that 12-month
period.
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4 | | (l) Beginning January 1, 2000, and each January 1 |
5 | | thereafter, each city,
village, or incorporated town that |
6 | | received distributions from the Municipal
Economic Development |
7 | | Fund, continued to hold any of those distributions, or
made |
8 | | expenditures from those distributions during the immediately |
9 | | preceding
year shall submit to
a financial and compliance and |
10 | | program audit of those distributions performed
by the Auditor |
11 | | General at no cost to the city, village, or incorporated town
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12 | | that received the distributions. The audit should be completed |
13 | | by June 30 or
as soon thereafter as possible. The audit shall |
14 | | be submitted to the State
Treasurer and those officers |
15 | | enumerated in Section 3-14 of the Illinois State
Auditing Act.
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16 | | If the Auditor General finds that distributions have been |
17 | | expended in violation
of this Section, the Auditor General |
18 | | shall refer the matter to the Attorney
General. The Attorney |
19 | | General may recover, in a civil action, 3 times the
amount of |
20 | | any distributions illegally expended.
For purposes of this |
21 | | subsection, the terms "financial audit," "compliance
audit", |
22 | | and "program audit" have the meanings ascribed to them in |
23 | | Sections 1-13
and 1-15 of the Illinois State Auditing Act.
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24 | | (m) On and after the effective date of this amendatory Act |
25 | | of the 94th General Assembly, beginning on the first date on |
26 | | which renewable energy certificates or other saleable |
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1 | | representations are sold by a qualified solid waste energy |
2 | | facility, with or without the electricity generated by the |
3 | | facility, and utilized by an electric utility or another |
4 | | electric supplier to comply with a renewable energy portfolio |
5 | | standard mandated by Illinois law or mandated by order of the |
6 | | Illinois Commerce Commission, that qualified solid waste |
7 | | energy facility may not sell electricity pursuant to this |
8 | | Section and shall be exempt from the requirements of |
9 | | subsections (a) through (l) of this Section, except that it |
10 | | shall remain obligated for any reimbursements required under |
11 | | subsection (d) of this Section. All of the provisions of this |
12 | | Section shall remain in full force and effect with respect to |
13 | | any qualified solid waste energy facility that sold electric |
14 | | energy pursuant to this Section at any time before July 1, 2006 |
15 | | and that does not sell renewable energy certificates or other |
16 | | saleable representations to meet the requirements of a |
17 | | renewable energy portfolio standard mandated by Illinois law or |
18 | | mandated by order of the Illinois Commerce Commission. |
19 | | (n) Notwithstanding any other provision of law to the |
20 | | contrary, beginning on July 1, 2006, the Illinois Commerce |
21 | | Commission shall not issue any order determining that a |
22 | | facility is a qualified solid waste energy facility unless the |
23 | | qualified solid waste energy facility was determined by the |
24 | | Illinois Commerce Commission to be a qualified solid waste |
25 | | energy facility before July 1, 2006. As a guide to the intent,
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26 | | interpretation, and application of this amendatory Act of the
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1 | | 94th General Assembly, it is hereby declared to be the policy
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2 | | of this State to honor each qualified solid waste energy |
3 | | facility
contract in existence on the effective date of this |
4 | | amendatory Act of
the 94th General Assembly if the qualified |
5 | | solid waste energy
facility continues to meet the requirements |
6 | | of this Section for
the duration of its respective contract |
7 | | term. |
8 | | (Source: P.A. 96-449, eff. 8-14-09.)
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