Bill Amendment: IL SB0075 | 2025-2026 | 104th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: UTILITIES-WATER ACQUISITION

Status: 2026-06-01 - Rule 3-9(a) / Re-referred to Assignments [SB0075 Detail]

Download: Illinois-2025-SB0075-Senate_Amendment_002.html

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Sen. Laura M. Murphy

Filed: 5/27/2026

 

 

 

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AMENDMENT TO SENATE BILL 75
AMENDMENT NO. ______. Amend Senate Bill 75, AS AMENDED, by
replacing everything after the enacting clause with the
following:
"Section 5. The Illinois Municipal Code is amended by
changing Section 11-124-5 as follows:
(65 ILCS 5/11-124-5)
Sec. 11-124-5. Acquisition of water or sewer systems by
eminent domain.
(a) In addition to other provisions providing for the
acquisition of water or sewer systems or water or sewer works,
whenever a public utility subject to the Public Utilities Act
utilizes public property (including, but not limited to,
right-of-way) of a municipality for the installation or
maintenance of all or part of its water distribution system or
sewer system, the municipality has the right to exercise

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eminent domain to acquire all or part of the water or sewer
system, in accordance with this Section. Unless it complies
with the provisions set forth in this Section, a municipality
is not permitted to acquire by eminent domain that portion of a
system located in another incorporated municipality without
agreement of that municipality, but this provision shall not
prevent the acquisition of that portion of the water or sewer
system existing within the acquiring municipality.
(b) Where a water or sewer system that is owned by a public
utility (as defined in the Public Utilities Act) provides
water or sewer service to customers located in 2 or more
municipalities, the system may be acquired by a majority of
the municipalities by eminent domain. If the system is to be
acquired by more than one municipality, then there must be an
intergovernmental agreement in existence between the acquiring
municipalities providing for the acquisition.
(c) If a water or sewer system that is owned by a public
utility provides water or sewer service to customers located
in one or more municipalities and also to customers in an
unincorporated area and if at least 70% of the customers of the
system or portion thereof are located within the municipality
or municipalities, then the system, or portion thereof as
determined by the corporate authorities, may be acquired,
using eminent domain or otherwise, by either a municipality
under subsection (a) or an entity created by agreement between
municipalities where at least 70% of the customers reside. For

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the purposes of determining "customers of the system", only
retail customers directly billed by the company shall be
included in the computation. The number of customers of the
system most recently reported to the Illinois Commerce
Commission for any calendar year preceding the year a
resolution is passed by a municipality or municipalities
expressing preliminary intent to purchase the water or sewer
system or portion thereof shall be presumed to be the total
number of customers within the system. The public utility
shall provide information relative to the number of customers
within each municipality and within the system within 60 days
after any such request by a municipality.
(d) In the case of acquisition by a municipality or
municipalities or a public entity created by law to own or
operate a water system under this Section, service and water
supply must be provided to persons who are customers of the
system on the effective date of this amendatory Act of the 94th
General Assembly without discrimination based on whether the
customer is located within or outside of the boundaries of the
acquiring municipality or municipalities or entity, and a
supply contract existing on the effective date of this
amendatory Act of the 94th General Assembly must be honored by
an acquiring municipality, municipalities, or entity according
to the terms so long as the agreement does not conflict with
any other existing agreement.
(e) For the purposes of this Section, "system" includes

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all assets reasonably necessary to provide water or sewer
service to a contiguous or compact geographical service area
or to an area served by a common pipeline and include, but are
not limited to, interests in real estate, all wells, pipes,
treatment plants, pumps and other physical apparatus, data and
records of facilities and customers, fire hydrants, equipment,
or vehicles and also includes service agreements and
obligations derived from use of the assets, whether or not the
assets are contiguous to the municipality, municipalities, or
entity created for the purpose of owning or operating a water
or sewer system.
(f) Before making a good faith offer, a municipality may
pass a resolution of intent to study the feasibility of
purchasing or exercising its power of eminent domain to
acquire any water system or water works, sewer system or sewer
works, or combined water and sewer system or works, or part
thereof. Upon the passage of such a resolution, the
municipality shall have the right to review and inspect all
financial and other records, and both corporeal and
incorporeal assets of such utility related to the condition
and the operation of the system or works, or part thereof, as
part of the study and determination of feasibility of the
proposed acquisition by purchase or exercise of the power of
eminent domain, and the utility shall make knowledgeable
persons who have access to all relevant facts and information
regarding the subject system or works available to answer

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inquiries related to the study and determination.
The right to review and inspect shall be upon reasonable
notice to the utility, with reasonable inspection and review
time limitations and reasonable response times for production,
copying, and answer. In addition, the utility may utilize a
reasonable security protocol for personnel on the
municipality's physical inspection team.
In the absence of other agreement, the utility must
respond to any notice by the municipality concerning its
review and inspection within 21 days after receiving the
notice. The review and inspection of the assets of the company
shall be over such period of time and carried out in such
manner as is reasonable under the circumstances.
Information requested that is not privileged or protected
from discovery under the Illinois Code of Civil Procedure but
is reasonably claimed to be proprietary, including, without
limitation, information that constitutes trade secrets or
information that involves system security concerns, shall be
provided, but shall not be considered a public record and
shall be kept confidential by the municipality.
In addition, the municipality must, upon request,
reimburse the utility for the actual, reasonable costs and
expenses, excluding attorneys' fees, incurred by the utility
as a result of the municipality's inspection and requests for
information. Upon written request, the utility shall issue a
statement itemizing, with reasonable detail, the costs and

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expenses for which reimbursement is sought by the utility.
Where such written request for a statement has been made, no
payment shall be required until 30 days after receipt of the
statement. Such reimbursement by the municipality shall be
considered income for purposes of any rate proceeding or other
financial request before the Illinois Commerce Commission by
the utility.
The municipality and the utility shall cooperate to
resolve any dispute arising under this subsection. In the
event the dispute under this subsection cannot be resolved,
either party may request relief from the circuit court in any
county in which the water or sewer system is located, with the
prevailing party to be awarded such relief as the court deems
appropriate under the discovery abuse sanctions currently set
forth in the Illinois Code of Civil Procedure.
The municipality's right to inspect physical assets and
records in connection with the purpose of this Section shall
not be exercised with respect to any system more than one time
during a 5-year period, unless a substantial change in the
size of the system or condition of the operating assets of the
system has occurred since the previous inspection. Rights
under franchise agreements and other agreements or statutory
or regulatory provisions are not limited by this Section and
are preserved.
The passage of time between an inspection of the utilities
and physical assets and the making of a good faith offer or

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initiation of an eminent domain action because of the limit
placed on inspections by this subsection shall not be used as a
basis for challenging the good faith of any offer or be used as
the basis for attacking any appraisal, expert, argument, or
position before a court related to an acquisition by purchase
or eminent domain.
(g) Notwithstanding any other provision of law, the
Illinois Commerce Commission has no approval authority of any
eminent domain action brought by any governmental entity or
combination of such entities to acquire water or sewer systems
or water or sewer works, except as is provided in subsection
(h) of Section 10-5-10 of the Eminent Domain Act.
(h) The provisions of this Section are severable under
Section 1.31 of the Statute on Statutes.
(i) This Section does not apply to any public utility
company that, on January 1, 2006, supplied a total of 70,000 or
fewer meter connections in the State unless and until (i) that
public utility company receives approval from the Illinois
Commerce Commission under Section 7-204 of the Public
Utilities Act for the reorganization of the public utility
company or (ii) the majority control of the company changes
through a stock sale, a sale of assets, a merger (other than an
internal reorganization) or otherwise. For the purpose of this
Section, "public utility company" means the public utility
providing water or sewer service and includes any of its
corporate parents, subsidiaries, or affiliates possessing a

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franchised water or sewer service in the State.
(j) Any contractor or subcontractor that performs work on
a water or sewer system acquired by a municipality or
municipalities under this Section shall comply with the
requirements of Section 30-22 of the Illinois Procurement
Code. The contractor or subcontractor shall submit evidence of
compliance with Section 30-22 to the municipality or
municipalities.
(k) The municipality or municipalities acquiring the water
or sewer system shall offer available employee positions to
the qualified employees of the acquired water or sewer system.
(l) No later than 60 days after January 1, 2027, and at
least once every 5 years thereafter, a public utility subject
to the Public Utilities Act shall provide notice via U.S. Mail
to the municipal clerk of each municipality in which the
public utility provides water or sewer service that includes
an explanation of the rights afforded to a municipality under
this Section.
The notice under this subsection (l) may be sent on a
postcard via U.S. Mail and shall be written in a substantially
similar format to the following:
"All or part of (insert name of service area), owned and
operated by (insert name of public utility), is within the
geographic boundaries of (insert municipality). Section
11-124-5 of the Illinois Municipal Code grants a municipality
the right, via resolution, to study the feasibility of

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purchasing or exercising its power of eminent domain to
acquire any water system or water works, sewer system or sewer
works, or combined water and sewer system or water and sewer
works.
(Source: P.A. 103-13, eff. 6-9-23.)
Section 10. The Public Utilities Act is amended by
changing Section 9-210.5 as follows:
(220 ILCS 5/9-210.5)
(Section scheduled to be repealed on June 1, 2028)
Sec. 9-210.5. Valuation of water and sewer utilities.
(a) In this Section:
"Disinterested" means that the person directly
involved (1) is not a director, officer, or an employee of
the large public utility or the water or sewer utility or
its direct affiliates or subsidiaries for at least 12
months before becoming engaged under this Section; (2)
shall not derive a material financial benefit from the
sale of the water or sewer utility other than fees for
services rendered, and (3) shall not have a member of the
person's immediate family, including a spouse, parents or
spouse's parents, children or spouses of children, or
siblings and their spouses or children, be a director,
officer, or employee of either the large public utility or
water or sewer utility or the water or sewer utility or its

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direct affiliates or subsidiaries for at least 12 months
before becoming engaged under this Section or receive a
material financial benefit from the sale of the water or
sewer utility other than fees for services rendered.
"District" means a service area of a large public
utility whose customers are subject to the same rate
tariff.
"Large public utility" means an investor-owned public
utility that:
(1) is subject to regulation by the Illinois
Commerce Commission under this Act;
(2) regularly provides water or sewer service to
more than 15,000 customer connections;
(3) provides safe and adequate service; and
(4) is not a water or sewer utility as defined in
this subsection (a).
"Next rate case" means a large public utility's first
general rate case after the date the large public utility
acquires the water or sewer utility where the acquired
water or sewer utility's cost of service is considered as
part of determining the large public utility's resulting
rates.
"Prior rate case" means a large public utility's
general rate case resulting in the rates in effect for the
large public utility at the time it acquires the water or
sewer utility.

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"Utility service source" means the water or sewer
utility or large public utility from which the customer
receives its utility service type.
"Utility service type" means water utility service or
sewer utility service or water and sewer utility service.
"Water or sewer utility" means any of the following:
(1) a public utility that regularly provides water
or sewer service to 6,000 or fewer customer
connections;
(2) a water district, including, but not limited
to, a public water district, water service district,
or surface water protection district, or a sewer
district of any kind established as a special district
under the laws of this State that regularly provides
water or sewer service;
(3) a waterworks system or sewerage system
established under the Township Code that regularly
provides water or sewer service; or
(4) a water system or sewer system owned by a
municipality that regularly provides water or sewer
service; and
(5) any other entity that is not a public utility
that regularly provides water or sewer service.
(b) Notwithstanding any other provision of this Act, a
large public utility that acquires a water or sewer utility
may request that the Commission use, and, if so requested, the

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Commission shall use, the procedures set forth under this
Section to establish the ratemaking rate base of that water or
sewer utility at the time when it is acquired by the large
public utility.
(c) If a large public utility elects the procedures under
this Section to establish the rate base of a water or sewer
utility that it is acquiring, then 3 appraisals shall be
performed. The average of these 3 appraisals shall represent
the fair market value of the water or sewer utility that is
being acquired. The appraisals shall be performed by 3
appraisers approved by the Commission's Executive Director or
designee and engaged by either the water or sewer utility
being acquired or by the large public utility. Each appraiser
shall be engaged on reasonable terms approved by the
Commission. Each appraiser shall be a disinterested person
licensed as a State certified general real estate appraiser
under the Real Estate Appraiser Licensing Act of 2002.
Each appraiser shall:
(1) be sworn to determine the fair market value of the
water or sewer utility by establishing the amount for
which the water or sewer utility would be sold in a
voluntary transaction between a willing buyer and willing
seller under no obligation to buy or sell;
(2) determine fair market value in compliance with the
Uniform Standards of Professional Appraisal Practice;
(3) engage one disinterested engineer who is licensed

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in this State, and who may be the same engineer that is
engaged by the other appraisers, to prepare an assessment
of the tangible assets of the water or sewer utility,
which is to be incorporated into the appraisal under the
cost approach;
(4) request from the manager of the Accounting
Department, if the water or sewer utility is a public
utility that is regulated by the Commission, a list of
investments made by the water or sewer utility that had
been disallowed previously and that shall be excluded from
the calculation of the large public utility's rate base in
its next rate case; and
(5) return their appraisal, in writing, to the water
or sewer utility and large public utility in a reasonable
and timely manner.
If the appraiser cannot engage an engineer, as described
in paragraph (3) of this subsection (c), within 30 days after
the appraiser is engaged, then the Commission's Executive
Director or designee shall recommend the engineer the
appraiser should engage. The Commission's Executive Director
or designee shall provide his or her recommendation within 30
days after he or she is officially notified of the appraiser's
failure to engage an engineer and the appraiser shall promptly
work to engage the recommended engineer. If the appraiser is
unable to negotiate reasonable engagement terms with the
recommended engineer within 15 days after the recommendation

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by the Commission's Executive Director or designee, then the
appraiser shall notify the Commission's Executive Director or
designee and the process shall be repeated until an engineer
is successfully engaged.
(c-5) Beginning on January 1, 2027, if a large public
utility elects the procedures under this Section to acquire a
water or sewer utility, the large public utility shall, within
45 days after filing a petition for a certificate of public
convenience and necessity under Section 8-406, provide a
notice to each existing customer of the large public utility
on the customer's monthly bill, either via U.S. Mail or
electronically, informing the customer of the terms of the
proposed acquisition, including the proposed purchase price
identified in the signed asset purchase agreement, by the
large public utility. If the notice is provided via U.S. Mail,
the notice shall include the text of a link to the portion of
the Commission's website that houses the applicable docket
information. If the notice is provided electronically, the
notice shall include a link to the portion of the Commission's
website that houses the applicable docket information.
(d) Twenty percent of either The lesser of (i) the
purchase price or (ii) the fair market value determined under
subsection (c) of this Section shall constitute the rate base
associated with the water or sewer utility as acquired by and
incorporated into the rate base of the district designated by
the acquiring large public utility under this Section, subject

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to any adjustments that the Commission deems necessary to
ensure such rate base reflects prudent and useful investments
in the provision of public utility service. The difference
between the rate base and the purchase price or fair market
value shall be borne by the shareholders of the acquiring
large public utility. The reasonable transaction and closing
costs incurred by the large public utility shall be treated
consistent with the applicable accounting standards under this
Act. The total amount of all of the appraisers' fees to be
included in the transaction and closing costs shall not exceed
the greater of $15,000 or 5% of the appraised value of the
water or sewer utility being acquired. This rate base
treatment shall not be deemed to violate this Act, including,
but not limited to, any Sections in Articles VIII and IX of
this Act that might be affected by this Section, provided that
only 20% of the transaction and closing costs are included in
the rate base. Any acquisition of a water or sewer utility that
affects the cumulative base rates of the large public
utility's existing ratepayers in the tariff group into which
the water or sewer utility is to be combined by less than (1)
2.5% at the time of the acquisition for any single acquisition
completed under this Section or (2) 5% for all acquisitions
completed under this Section before the Commission's final
order in the next rate case shall not be deemed to violate
Section 7-204 or any other provision of this Act.
In the Commission's order that approves the large public

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utility's acquisition of the water or sewer utility, the
Commission shall issue its decision establishing (1) the
ratemaking rate base of the water or sewer utility; (2) the
district or tariff group with which the water or sewer utility
shall be combined for ratemaking purposes, if such combination
has been proposed by the large public utility; and (3) the
rates to be charged to customers in the water or sewer utility.
(e) If the water or sewer utility being acquired is owned
by the State or any political subdivision thereof, then the
water or sewer utility must inform the public of the terms of
its acquisition by the large public utility by (1) holding a
public meeting prior to the acquisition and (2) causing to be
published, in a newspaper of general circulation in the area
that the water or sewer utility operates, a notice setting
forth the terms of its acquisition by the large public utility
and options that shall be available to assist customers to pay
their bills after the acquisition.
(f) The large public utility may recommend the district or
tariff group of which the water or sewer utility shall, for
ratemaking purposes, become a part after the acquisition, or
may recommend a lesser rate for the water or sewer utility. If
the large public utility recommends a lesser rate, it shall
submit to the Commission its proposed rate schedule and the
proposed final tariff group for the acquired water or sewer
utility. The Commission's approved district or tariff group or
rates shall be consistent with the large public utility's

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recommendation, unless such recommendation can be shown to be
contrary to the public interest.
(g) From the date of acquisition until the date that new
rates are effective in the acquiring large public utility's
next rate case, the customers of the acquired water or sewer
utility shall pay the approved then-existing rates of the
district or tariff group as ordered by the Commission, or some
lesser rates as recommended by the large public utility and
approved by the Commission under subsection (f); provided,
that, if the application of such rates of the large public
utility to customers of the acquired water or sewer utility
using 54,000 gallons annually results in an increase to the
total annual bill of customers of the acquired water or sewer
utility, exclusive of fire service or related charges, then
the large public utility's rates charged to the customers of
the acquired water or sewer utility shall be uniformly
reduced, if any reduction is required, by the percent that
results in the total annual bill, exclusive of fire services
or related charges, for the customers of the acquired water or
sewer utility using 54,000 gallons being equal to 1.5% of the
latest median household income as reported by the United
States Census Bureau for the most applicable community or
county. For each customer of the water or sewer utility with
potable water usage values that cannot be reasonably obtained,
a value of 4,500 gallons per month shall be assigned. These
rates shall not be deemed to violate this Act including, but

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not limited to, Section 9-101 and any other applicable
Sections in Articles VIII and IX of this Act. The Commission
shall issue its decision establishing the rates effective for
the water or sewer utility immediately following an
acquisition in its order approving the acquisition.
(h) In the acquiring large public utility's next rate
case, the water or sewer utility and the district or tariff
group ordered by the Commission and their costs of service may
be combined under the same rate tariff. This rate tariff shall
be based on allocation of costs of service of the acquired
water or sewer utility and the large public utility's district
or tariff group ordered by the Commission and utilizing a rate
design that does not distinguish among customers on the basis
of utility service source or type. This rate tariff shall not
be deemed to violate this Act including, but not limited to,
Section 9-101 of this Act. In the acquiring large public
utility's 2 rate cases after an acquisition, but in no
subsequent rate case, the large public utility may file a rate
tariff for a water or sewer utility acquired under this
Section that establishes lesser rates than the district or
tariff group into which the water or sewer utility is to be
combined. Those lesser rates shall not be deemed to violate
Section 7-204 or any other provision of this Act if they affect
the cumulative base rates of the large public utility's
existing rate payers in the district or tariff by less than
2.5%.

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(i) Any post-acquisition improvements made by the large
public utility in the water or sewer utility shall accrue a
cost for financing set at the large public utility's
determined rate for allowance for funds used during
construction, inclusive of the debt, equity, and income tax
gross up components, after the date on which the expenditure
was incurred by the large public utility until the investment
has been in service for a 4-year period or, if sooner, until
the time the rates are implemented in the large public
utility's next rate case.
Any post-acquisition improvements made by the large public
utility in the water or sewer utility shall not be depreciated
for ratemaking purposes from the date on which the expenditure
was incurred by the large public utility until the investment
has been in service for a 4-year period or, if sooner, until
the time the rates are implemented in the large public
utility's next rate case.
(j) This Section shall be exclusively applied to large
public utilities in the voluntary and mutually agreeable
acquisition of water or sewer utilities. Any petitions filed
with the Commission related to the acquisitions described in
this Section, including petitions seeking approvals or
certificates required by this Act, shall be deemed approved
unless the Commission issues its final order within 11 months
after the date the large public utility filed its initial
petition. This Section shall only apply to utilities providing

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water or sewer service and shall not be construed in any manner
to apply to electric corporations, natural gas corporations,
or any other utility subject to this Act.
(k) Nothing in this Section shall prohibit a party from
declining to proceed with an acquisition or be deemed as
establishing the final purchase price of an acquisition.
(l) In the Commission's order that approves the large
utility's acquisition of the water or sewer utility, the
Commission shall address each aspect of the acquisition
transaction for which approval is required under the Act.
(m) Any contractor or subcontractor that performs work on
a water or sewer utility acquired by a large public utility
under this Section shall be a responsible bidder as described
in Section 30-22 of the Illinois Procurement Code. The
contractor or subcontractor shall submit evidence of meeting
the requirements to be a responsible bidder as described in
Section 30-22 to the large public water or sewer utility. Any
new water or sewer facility built as a result of the
acquisition shall require the contractor to enter into a
project labor agreement. The large public utility acquiring
the water or sewer utility shall offer employee positions to
qualified employees of the acquired water or sewer utility.
(n) This Section is repealed on June 30, 2038 June 1, 2028.
(Source: P.A. 102-149, eff. 1-1-22.)
Section 99. Effective date. This Act takes effect January

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1, 2027.".