Bill Text: IL HB0688 | 2011-2012 | 97th General Assembly | Introduced


Bill Title: Amends the Public Utilities Act. Makes a technical change in a Section concerning tax credits related to qualified solid waste energy facilities.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB0688 Detail]

Download: Illinois-2011-HB0688-Introduced.html


97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB0688

Introduced , by Rep. Michael J. Madigan

SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-403.1 from Ch. 111 2/3, par. 8-403.1

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.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Public Utilities Act is amended by changing
5Section 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
8waste energy facility; tax credit; distributions for economic
9development.
10 (a) It is hereby declared to be the the policy of this
11State to encourage the development of alternate energy
12production facilities in order to conserve our energy resources
13and 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
16determined by the Illinois Commerce Commission to qualify as
17such under the Local Solid Waste Disposal Act, to use methane
18gas generated from landfills as its primary fuel, and to
19possess characteristics that would enable it to qualify as a
20cogeneration or small power production facility under federal
21law.
22 (c) In furtherance of the policy declared in this Section,
23the Illinois Commerce Commission shall require electric

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1utilities to enter into long-term contracts to purchase
2electricity from qualified solid waste energy facilities
3located in the electric utility's service area, for a period
4beginning on the date that the facility begins generating
5electricity and having a duration of not less than 10 years in
6the case of facilities fueled by landfill-generated methane, or
720 years in the case of facilities fueled by methane generated
8from a landfill owned by a forest preserve district. The
9purchase rate contained in such contracts shall be equal to the
10average amount per kilowatt-hour paid from time to time by the
11unit or units of local government in which the electricity
12generating facilities are located, excluding amounts paid for
13street lighting and pumping service.
14 (d) Whenever a public utility is required to purchase
15electricity pursuant to subsection (c) above, it shall be
16entitled to credits in respect of its obligations to remit to
17the State taxes it has collected under the Electricity Excise
18Tax Law equal to the amounts, if any, by which payments for
19such electricity exceed (i) the then current rate at which the
20utility must purchase the output of qualified facilities
21pursuant to the federal Public Utility Regulatory Policies Act
22of 1978, less (ii) any costs, expenses, losses, damages or
23other amounts incurred by the utility, or for which it becomes
24liable, arising out of its failure to obtain such electricity
25from such other sources. The amount of any such credit shall,
26in the first instance, be determined by the utility, which

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1shall make a monthly report of such credits to the Illinois
2Commerce Commission and, on its monthly tax return, to the
3Illinois Department of Revenue. Under no circumstances shall a
4utility be required to purchase electricity from a qualified
5solid waste energy facility at the rate prescribed in
6subsection (c) of this Section if such purchase would result in
7estimated tax credits that exceed, on a monthly basis, the
8utility's estimated obligation to remit to the State taxes it
9has collected under the Electricity Excise Tax Law. The owner
10or operator shall negotiate facility operating conditions with
11the purchasing utility in accordance with that utility's posted
12standard terms and conditions for small power producers. If the
13Department of Revenue disputes the amount of any such credit,
14such dispute shall be decided by the Illinois Commerce
15Commission. Whenever a qualified solid waste energy facility
16has paid or otherwise satisfied in full the capital costs or
17indebtedness incurred in developing and implementing the
18qualified solid waste energy facility, whenever the qualified
19solid waste energy facility ceases to operate and produce
20electricity from methane gas generated from landfills, or at
21the end of the contract entered into pursuant to subsection (c)
22of this Section, whichever occurs first, the qualified solid
23waste energy facility shall reimburse the Public Utility Fund
24and the General Revenue Fund in the State treasury for the
25actual reduction in payments to those Funds caused by this
26subsection (d) in a manner to be determined by the Illinois

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1Commerce Commission and based on the manner in which revenues
2for those Funds were reduced. The payments shall be made to the
3Illinois Commerce Commission, which shall determine the
4appropriate disbursements to the Public Utility Fund and the
5General Revenue Fund based on this subsection (d).
6 (e) The Illinois Commerce Commission shall not require an
7electric utility to purchase electricity from any qualified
8solid waste energy facility which is owned or operated by an
9entity that is primarily engaged in the business of producing
10or selling electricity, gas, or useful thermal energy from a
11source other than one or more qualified solid waste energy
12facilities.
13 (e-5) A qualified solid waste energy facility may receive
14the purchase rate provided in subsection (c) of this Section
15only for kilowatt-hours generated by the use of methane gas
16generated from landfills. The purchase rate provided in
17subsection (c) of this Section does not apply to electricity
18generated by the use of a fuel that is not methane gas
19generated from landfills. If the Illinois Commerce Commission
20determines that a qualified solid waste energy facility has
21violated the requirement regarding the use of methane gas
22generated from a landfill as set forth in this subsection
23(e-5), then the Commission shall issue an order requiring that
24the qualified solid waste energy facility repay the State for
25all dollar amounts of electricity sales that are determined by
26the Commission to be the result of the violation. As part of

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1that order, the Commission shall have the authority to revoke
2the facility's approval to act as a qualified solid waste
3energy facility granted by the Commission under this Section.
4If the amount owed by the qualified solid waste energy facility
5is not received by the Commission within 90 days after the date
6of the Commission's order that requires repayment, then the
7Commission shall issue an order that revokes the facility's
8approval to act as a qualified solid waste energy facility
9granted by the Commission under this Section. The Commission's
10action that vacates prior qualified solid waste energy facility
11approval does not excuse the repayment to the State treasury
12required by subsection (d) of this Section for utility tax
13credits accumulated up to the time of the Commission's action.
14A qualified solid waste energy facility must receive Commission
15approval before it may use any fuel in addition to methane gas
16generated from a landfill in order to generate electricity. If
17a qualified solid waste energy facility petitions the
18Commission to use any fuel in addition to methane gas generated
19from a landfill to generate electricity, then the Commission
20shall 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
12purchase contract with a qualified solid waste energy facility
13has no duty to determine whether the electricity being
14purchased was generated by the use of methane gas generated
15from a landfill or was generated by the use of some other fuel
16in violation of the requirements of this subsection (e-5).
17 (f) This Section does not require an electric utility to
18construct additional facilities unless those facilities are
19paid for by the owner or operator of the affected qualified
20solid waste energy facility.
21 (g) The Illinois Commerce Commission shall require that:
22(1) electric utilities use the electricity purchased from a
23qualified solid waste energy facility to displace electricity
24generated from nuclear power or coal mined and purchased
25outside the boundaries of the State of Illinois before
26displacing electricity generated from coal mined and purchased

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1within the State of Illinois, to the extent possible, and (2)
2electric utilities report annually to the Commission on the
3extent of such displacements.
4 (h) Nothing in this Section is intended to cause an
5electric utility that is required to purchase power hereunder
6to incur any economic loss as a result of its purchase. All
7amounts paid for power which a utility is required to purchase
8pursuant to subparagraph (c) shall be deemed to be costs
9prudently incurred for purposes of computing charges under
10rates authorized by Section 9-220 of this Act. Tax credits
11provided for herein shall be reflected in charges made pursuant
12to rates so authorized to the extent such credits are based
13upon a cost which is also reflected in such charges.
14 (i) Beginning in February 1999 and through January 2013,
15each qualified solid waste energy facility that sells
16electricity to an electric utility at the purchase rate
17described in subsection (c) shall file with the Department of
18Revenue on or before the 15th of each month a form, prescribed
19by the Department of Revenue, that states the number of
20kilowatt hours of electricity for which payment was received at
21that purchase rate from electric utilities in Illinois during
22the immediately preceding month. This form shall be accompanied
23by a payment from the qualified solid waste energy facility in
24an amount equal to six-tenths of a mill ($0.0006) per kilowatt
25hour of electricity stated on the form. Beginning on the
26effective date of this amendatory Act of the 92nd General

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1Assembly, a qualified solid waste energy facility must file the
2form required under this subsection (i) before the 15th of each
3month regardless of whether the facility received any payment
4in the previous month. Payments received by the Department of
5Revenue shall be deposited into the Municipal Economic
6Development Fund, a trust fund created outside the State
7treasury. The State Treasurer may invest the moneys in the Fund
8in any investment authorized by the Public Funds Investment
9Act, and investment income shall be deposited into and become
10part of the Fund. Moneys in the Fund shall be used by the State
11Treasurer as provided in subsection (j).
12 Beginning on July 1, 2006 through January 31, 2013, each
13month the State Treasurer shall certify the following to the
14State 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.
21As soon as practicable after receiving the certification from
22the State Treasurer, the State Comptroller shall transfer from
23the General Revenue Fund to the Municipal Economic Development
24Fund in the State treasury an amount equal to the amount by
25which the amount calculated under item (B) of this paragraph
26exceeds the amount calculated under item (A) of this paragraph,

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1if any.
2 The obligation of a qualified solid waste energy facility
3to make payments into the Municipal Economic Development Fund
4shall terminate upon either: (1) expiration or termination of a
5facility's contract to sell electricity to an electric utility
6at the purchase rate described in subsection (c); or (2) entry
7of an enforceable, final, and non-appealable order by a court
8of competent jurisdiction that Public Act 89-448 is invalid.
9Payments by a qualified solid waste energy facility into the
10Municipal Economic Development Fund do not relieve the
11qualified solid waste energy facility of its obligation to
12reimburse the Public Utility Fund and the General Revenue Fund
13for the actual reduction in payments to those Funds as a result
14of credits received by electric utilities under subsection (d).
15 A qualified solid waste energy facility that fails to
16timely file the requisite form and payment as required by this
17subsection (i) shall be subject to penalties and interest in
18conformance with the provisions of the Illinois Uniform Penalty
19and Interest Act.
20 Every qualified solid waste energy facility subject to the
21provisions of this subsection (i) shall keep and maintain
22records and books of its sales pursuant to subsection (c),
23including payments received from those sales and the
24corresponding tax payments made in accordance with this
25subsection (i), and for purposes of enforcement of this
26subsection (i) all such books and records shall be subject to

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1inspection by the Department of Revenue or its duly authorized
2agents or employees.
3 When a qualified solid waste energy facility fails to file
4the form or make the payment required under this subsection
5(i), the Department of Revenue, to the extent that it is
6practical, may enforce the payment obligation in a manner
7consistent with Section 5 of the Retailers' Occupation Tax Act,
8and if necessary may impose and enforce a tax lien in a manner
9consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f, 5g, and 5i of
10the Retailers' Occupation Tax Act. No tax lien may be imposed
11or enforced, however, unless a qualified solid waste energy
12facility fails to make the payment required under this
13subsection (i). Only to the extent necessary and for the
14purpose of enforcing this subsection (i), the Department of
15Revenue may secure necessary information from a qualified solid
16waste energy facility in a manner consistent with Section 10 of
17the Retailers' Occupation Tax Act.
18 All information received by the Department of Revenue in
19its administration and enforcement of this subsection (i) shall
20be confidential in a manner consistent with Section 11 of the
21Retailers' Occupation Tax Act. The Department of Revenue may
22adopt rules to implement the provisions of this subsection (i).
23 For purposes of implementing the maximum aggregate
24distribution provisions in subsections (j) and (k), when a
25qualified solid waste energy facility makes a late payment to
26the Department of Revenue for deposit into the Municipal

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1Economic Development Fund, that payment and deposit shall be
2attributed to the month and corresponding quarter in which the
3payment should have been made, and the Treasurer shall make
4retroactive distributions or refunds, as the case may be,
5whenever such late payments so require.
6 (j) The State Treasurer, without appropriation, must make
7distributions immediately after January 15, April 15, July 15,
8and October 15 of each year, up to maximum aggregate
9distributions of $500,000 for the distributions made in the 4
10quarters beginning with the April distribution and ending with
11the January distribution, from the Municipal Economic
12Development Fund to each city, village, or incorporated town
13located in Cook County that has approved construction within
14its boundaries of an incinerator that will burn recovered wood
15processed for fuel to generate electricity and will commence
16operation after 2009. Total distributions in the aggregate to
17all qualified cities, villages, and incorporated towns in the 4
18quarters beginning with the April distribution and ending with
19the January distribution shall not exceed $500,000. The amount
20of each distribution shall be determined pro rata based on the
21population of the city, village, or incorporated town compared
22to the total population of all cities, villages, and
23incorporated towns eligible to receive a distribution.
24Distributions received by a city, village, or incorporated town
25must be held in a separate account and may be used only to
26promote and enhance industrial, commercial, residential,

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1service, transportation, and recreational activities and
2facilities within its boundaries, thereby enhancing the
3employment opportunities, public health and general welfare,
4and economic development within the community, including
5administrative expenditures exclusively to further these
6activities. Distributions may also be used for cleanup of open
7dumping from vacant properties and the removal of structures
8condemned by the city, village, or incorporated town. These
9funds, however, shall not be used by the city, village, or
10incorporated town, directly or indirectly, to purchase, lease,
11operate, or in any way subsidize the operation of any
12incinerator, and these funds shall not be paid, directly or
13indirectly, by the city, village, or incorporated town to the
14owner, operator, lessee, shareholder, or bondholder of any
15incinerator. Moreover, these funds shall not be used to pay
16attorneys fees in any litigation relating to the validity of
17Public Act 89-448. Nothing in this Section prevents a city,
18village, or incorporated town from using other corporate funds
19for any legitimate purpose. For purposes of this subsection,
20the term "municipal waste" has the meaning ascribed to it in
21Section 3.290 of the Environmental Protection Act.
22 (k) If maximum aggregate distributions of $500,000 under
23subsection (j) have been made after the January distribution
24from the Municipal Economic Development Fund, then the balance
25in the Fund shall be refunded to the qualified solid waste
26energy facilities that made payments that were deposited into

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1the Fund during the previous 12-month period. The refunds shall
2be prorated based upon the facility's payments in relation to
3total payments for that 12-month period.
4 (l) Beginning January 1, 2000, and each January 1
5thereafter, each city, village, or incorporated town that
6received distributions from the Municipal Economic Development
7Fund, continued to hold any of those distributions, or made
8expenditures from those distributions during the immediately
9preceding year shall submit to a financial and compliance and
10program audit of those distributions performed by the Auditor
11General at no cost to the city, village, or incorporated town
12that received the distributions. The audit should be completed
13by June 30 or as soon thereafter as possible. The audit shall
14be submitted to the State Treasurer and those officers
15enumerated in Section 3-14 of the Illinois State Auditing Act.
16If the Auditor General finds that distributions have been
17expended in violation of this Section, the Auditor General
18shall refer the matter to the Attorney General. The Attorney
19General may recover, in a civil action, 3 times the amount of
20any distributions illegally expended. For purposes of this
21subsection, the terms "financial audit," "compliance audit",
22and "program audit" have the meanings ascribed to them in
23Sections 1-13 and 1-15 of the Illinois State Auditing Act.
24 (m) On and after the effective date of this amendatory Act
25of the 94th General Assembly, beginning on the first date on
26which renewable energy certificates or other saleable

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1representations are sold by a qualified solid waste energy
2facility, with or without the electricity generated by the
3facility, and utilized by an electric utility or another
4electric supplier to comply with a renewable energy portfolio
5standard mandated by Illinois law or mandated by order of the
6Illinois Commerce Commission, that qualified solid waste
7energy facility may not sell electricity pursuant to this
8Section and shall be exempt from the requirements of
9subsections (a) through (l) of this Section, except that it
10shall remain obligated for any reimbursements required under
11subsection (d) of this Section. All of the provisions of this
12Section shall remain in full force and effect with respect to
13any qualified solid waste energy facility that sold electric
14energy pursuant to this Section at any time before July 1, 2006
15and that does not sell renewable energy certificates or other
16saleable representations to meet the requirements of a
17renewable energy portfolio standard mandated by Illinois law or
18mandated by order of the Illinois Commerce Commission.
19 (n) Notwithstanding any other provision of law to the
20contrary, beginning on July 1, 2006, the Illinois Commerce
21Commission shall not issue any order determining that a
22facility is a qualified solid waste energy facility unless the
23qualified solid waste energy facility was determined by the
24Illinois Commerce Commission to be a qualified solid waste
25energy facility before July 1, 2006. As a guide to the intent,
26interpretation, and application of this amendatory Act of the

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194th General Assembly, it is hereby declared to be the policy
2of this State to honor each qualified solid waste energy
3facility contract in existence on the effective date of this
4amendatory Act of the 94th General Assembly if the qualified
5solid waste energy facility continues to meet the requirements
6of this Section for the duration of its respective contract
7term.
8(Source: P.A. 96-449, eff. 8-14-09.)
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