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

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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

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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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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by changing
Section 8-403.1 as follows:
(220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
Sec. 8-403.1. Electricity purchased from qualified solid
waste energy facility; tax credit; distributions for economic
development.
(a) It is hereby declared to be the the policy of this
State to encourage the development of alternate energy
production facilities in order to conserve our energy resources
and to provide for their most efficient use.
(b) For the purpose of this Section and Section 9-215.1,
"qualified solid waste energy facility" means a facility
determined by the Illinois Commerce Commission to qualify as
such under the Local Solid Waste Disposal Act, to use methane
gas generated from landfills as its primary fuel, and to
possess characteristics that would enable it to qualify as a
cogeneration or small power production facility under federal
law.
(c) In furtherance of the policy declared in this Section,
the Illinois Commerce Commission shall require electric

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

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

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

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that order, the Commission shall have the authority to revoke
the facility's approval to act as a qualified solid waste
energy facility granted by the Commission under this Section.
If the amount owed by the qualified solid waste energy facility
is not received by the Commission within 90 days after the date
of the Commission's order that requires repayment, then the
Commission shall issue an order that revokes the facility's
approval to act as a qualified solid waste energy facility
granted by the Commission under this Section. The Commission's
action that vacates prior qualified solid waste energy facility
approval does not excuse the repayment to the State treasury
required by subsection (d) of this Section for utility tax
credits accumulated up to the time of the Commission's action.
A qualified solid waste energy facility must receive Commission
approval before it may use any fuel in addition to methane gas
generated from a landfill in order to generate electricity. If
a qualified solid waste energy facility petitions the
Commission to use any fuel in addition to methane gas generated
from a landfill to generate electricity, then the Commission
shall have the authority to do the following:
(1) establish the methodology for determining the
amount of electricity that is generated by the use of
methane gas generated from a landfill and the amount that
is generated by the use of other fuel;
(2) determine all reporting requirements for the
qualified solid waste energy facility that are necessary

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for the Commission to determine the amount of electricity
that is generated by the use of methane gas from a landfill
and the amount that is generated by the use of other fuel
and the resulting payments to the qualified solid waste
energy facility; and
(3) require that the qualified solid waste energy
facility, at the qualified solid waste energy facility's
expense, install metering equipment that the Commission
determines is necessary to enforce compliance with this
subsection (e-5).
A public utility that is required to enter into a long-term
purchase contract with a qualified solid waste energy facility
has no duty to determine whether the electricity being
purchased was generated by the use of methane gas generated
from a landfill or was generated by the use of some other fuel
in violation of the requirements of this subsection (e-5).
(f) This Section does not require an electric utility to
construct additional facilities unless those facilities are
paid for by the owner or operator of the affected qualified
solid waste energy facility.
(g) The Illinois Commerce Commission shall require that:
(1) electric utilities use the electricity purchased from a
qualified solid waste energy facility to displace electricity
generated from nuclear power or coal mined and purchased
outside the boundaries of the State of Illinois before
displacing electricity generated from coal mined and purchased

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

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Assembly, a qualified solid waste energy facility must file the
form required under this subsection (i) before the 15th of each
month regardless of whether the facility received any payment
in the previous month. Payments received by the Department of
Revenue shall be deposited into the Municipal Economic
Development Fund, a trust fund created outside the State
treasury. The State Treasurer may invest the moneys in the Fund
in any investment authorized by the Public Funds Investment
Act, and investment income shall be deposited into and become
part of the Fund. Moneys in the Fund shall be used by the State
Treasurer as provided in subsection (j).
Beginning on July 1, 2006 through January 31, 2013, each
month the State Treasurer shall certify the following to the
State Comptroller:
(A) the amount received by the Department of Revenue
under this subsection (i) during the immediately preceding
month; and
(B) the amount received by the Department of Revenue
under this subsection (i) in the corresponding month in
calendar year 2002.
As soon as practicable after receiving the certification from
the State Treasurer, the State Comptroller shall transfer from
the General Revenue Fund to the Municipal Economic Development
Fund in the State treasury an amount equal to the amount by
which the amount calculated under item (B) of this paragraph
exceeds the amount calculated under item (A) of this paragraph,

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

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

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

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

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

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

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