Bill Text: IL SB3645 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Public Utilities Act. Provides specified requirements for when a company announces the permanent closure or decommissioning of a nuclear power plant. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Failed) 2021-01-13 - Session Sine Die [SB3645 Detail]

Download: Illinois-2019-SB3645-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB3645 Introduced 2/14/2020, by Sen. Sue Rezin SYNOPSIS AS INTRODUCED:
220 ILCS 5/8-508.1 from Ch. 111 2/3, par. 8-508.1
Amends the Public Utilities Act. Provides specified requirements for when a company announces the permanent closure or decommissioning of a nuclear power plant. Effective immediately.
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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 8-508.1 as follows:
(220 ILCS 5/8-508.1) (from Ch. 111 2/3, par. 8-508.1)
Sec. 8-508.1. (a) As used in this Section:
(1) "Decommissioning" means the series of activities
undertaken at the time a nuclear power plant is permanently
retired from service to ensure that the final entombment,
decontamination, dismantlement, removal and disposal of
the plant, including the plant site, and of any radioactive
components and materials associated with the plant, is
accomplished in compliance with all applicable Illinois
and federal laws, and to ensure that such final disposition
does not pose any threat to the public health and safety.
(2) "Decommissioning costs" means all reasonable costs
and expenses incurred in connection with the entombment,
decontamination, dismantlement, removal and disposal of
the structures, systems and components of a nuclear power
plant at the time of decommissioning, including all
expenses to be incurred in connection with the preparation
for decommissioning, such as engineering and other

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planning expenses, and to be incurred after the actual
decommissioning occurs, such as physical security and
radiation monitoring expenses, less proceeds of insurance,
salvage or resale of machinery, construction equipment or
apparatus the cost of which was charged as a
decommissioning expense.
(3) "Decommissioning trust" or "trust" means a
fiduciary account in a bank or other financial institution
established to hold the decommissioning funds provided
pursuant to subsection (b)(2) of this Section for the
eventual purpose of paying decommissioning costs, which
shall be separate from all other accounts and assets of the
public utility establishing the trust.
(4) "Nuclear power plant" or "plant" means a nuclear
fission thermal power plant. Each unit of a multi-unit site
shall be considered a separate plant.
(b) By 90 days after the effective date of this amendatory
Act of 1988, or by the date that the unit satisfies the
criteria used by the Internal Revenue Service for determining
when depreciation commences for federal income tax purposes on
a new generating unit, whichever is later, every public utility
that owns or operates, in whole or in part, a nuclear power
plant shall:
(1) establish 2 decommissioning trusts, which shall be
a "tax qualified" decommissioning trust and a "non-tax
qualified" decommissioning trust and shall hold the

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decommissioning funds established by the public utility
for all nuclear power plants pursuant to subsection (b)(2)
of this Section;
(2) establish 2 decommissioning funds for each such
plant, each of which shall be held for a plant as a
separate account in a decommissioning trust; and
(3) designate an independent trustee, subject to the
approval of the Commission, to administer each of the
decommissioning trusts.
(c) The 2 decommissioning trusts shall be known as the "tax
qualified" decommissioning trust and the "non-tax qualified"
decommissioning trust respectively. Each trust shall be
established and maintained as follows:
(1) The "tax qualified" trust shall be established and
maintained in accordance with Section 468A of the Internal
Revenue Code of 1986 or any successor thereto and shall be
funded by the public utility for each such power plant
through annual payments by the public utility that shall
not exceed the maximum amount allowable as a deduction for
federal income tax purposes for the year for which the
payments were made, in accordance with Section 468A of the
Internal Revenue Code of 1986 or any successor thereto.
(2) The "non-tax qualified" decommissioning trust
shall be funded by the public utility for each such power
plant through annual payments by the public utility that
shall consist of the difference between the total amounts

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of decommissioning expenses collected after the effective
date of this amendatory Act of 1988 through rates and
charges from the public utility's customers as provided by
the Commission minus the amounts contributed to the "tax
qualified" trust as provided by subsection (c)(1) of this
Section and deductible for federal income tax purposes in
accordance with Section 468A of the Internal Revenue Code
of 1986 or any successor thereto.
(3) The following restrictions shall apply in regard to
administration of each decommissioning trust:
(i) Distributions may be made from a nuclear
decommissioning trust only to satisfy the liabilities
of the public utility for nuclear decommissioning
costs relating to the nuclear power plant for which the
decommissioning fund was established and to pay
administrative costs, income taxes and other
incidental expenses of the trust.
(ii) Any assets in a nuclear decommissioning trust
that exceed the amount necessary to pay the nuclear
decommissioning costs of the nuclear power plant for
which the decommissioning fund was established shall
be refunded to the public utility that established the
fund for the purpose of refunds or credits, as soon as
practicable, to the utility's customers.
(iii) In the event a public utility sells or
otherwise disposes of its direct ownership interest,

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or any part thereof, in a nuclear power plant with
respect to which a nuclear decommissioning fund has
been established, the assets of the fund shall be
distributed to the public utility to the extent of the
reductions in its liability for future decommissioning
after taking into account the liabilities of the public
utility for future decommissioning of such nuclear
power plant and the liabilities that have been assumed
by another entity. The public utility shall, as soon as
practicable, provide refunds or credits to its
customers representing the full amount of the
reductions in its liability for future
decommissioning.
(iv) The trustee shall invest the "tax qualified"
trust assets only in secure assets that are prudent
investments for assets held in trust and in such a way
as to attempt to maximize the after-tax return on funds
invested, subject to the limitations specified in
Section 468A of the Internal Revenue Code of 1986 or
any successor thereto.
(v) The trustee shall invest the "non-tax
qualified" trust assets only in secure assets that are
prudent investments for assets held in trust and in
such a way as to attempt to maximize the after-tax
return on funds invested. However the trustee shall not
invest any portion of the "non-tax qualified" trust's

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funds in the securities or assets of any operator of a
nuclear power plant.
(vi) The "non-tax qualified" trust shall be
subject to the prohibitions against self-dealing
applicable to the "tax qualified" trust as specified in
Section 468A of the Internal Revenue Code of 1986, or
any successor thereto.
(vii) All income earned by the trust's funds shall
become a part of the trust's funds and subject to the
provisions of this Section.
(viii) The Commission may adopt by rule or
regulation such further restrictions as it deems
necessary for the sound management of the trust's
funds, consistent with the purposes of this Section.
(d) By 90 days after the effective date of this amendatory
Act of 1988, the Commission shall determine an appropriate
method to segregate, either internally or externally, all
decommissioning funds collected prior to the effective date of
this amendatory Act of 1988 by the utility from its customers,
and shall order any change in past decommissioning funding
methods that the Commission finds necessary. In making its
determination of the appropriate funding method, the
Commission shall give consideration to, but not be limited by,
all applicable federal regulations. The change in funding
method shall be phased-in over an appropriate period of time.
(e) The trustee of a trust shall report annually to the

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Commission, or more frequently if ordered by the Commission.
The report shall include:
(1) the trust's State and federal tax returns;
(2) a report on the trust's portfolio of investments
and the return thereon;
(3) the date and amount of payments received by the
trust from the public utility;
(4) a copy of all correspondence between the trust and
the Internal Revenue Service; and
(5) any other information the Commission orders the
trust to provide.
(f) A nuclear decommissioning trust established pursuant
to this Section shall be exempt from taxation in Illinois.
(g) Beginning on or before May 1, 2020, and every 2 years
thereafter, the owner or operator of each nuclear power plant
in this State shall provide the Commission with a copy of the
nuclear decommissioning funding assurance status report
submitted to the Nuclear Regulatory Commission and, as
applicable, to the Federal Energy Regulatory Commission.
Beginning June 1, 2020, and every 2 years thereafter, the
Commission shall provide the General Assembly with a copy of
the nuclear decommissioning funding assurance status report
for shutdown units as submitted by the owner or operator of a
nuclear power plant in this State to the Nuclear Regulatory
Commission and, as applicable, to the Federal Energy Regulatory
Commission.

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(h) The following shall begin when a company announces the
permanent closure or decommissioning of a nuclear power plant:
(1) Moneys from the decommissioning fund shall
continue to fund county and first responders at current
levels until the site is fully decommissioned, including
emergency communication devices.
(2) Moneys from the decommissioning fund shall be used
to fund an economic recovery fund which includes job and
skills retraining for displaced workers and an economic
development recovery plan and implementation for the
region.
(3) Property tax payments and assessed values of the
plant shall decrease in a stepped-down pattern over a
10-year period.
(4) Twenty-five members shall be appointed by the local
communities and county governments affected by the closure
in the region to an advisory panel which will receive
quarterly updates from the nuclear power plant regarding
decommissioning funds, spent fuel storage options,
timelines, property disposal and other issues that come
before the group. Experts or consultants used by the
advisory panel shall be compensated from the
decommissioning funds.
(Source: P.A. 101-44, eff. 1-1-20.)
Section 99. Effective date. This Act takes effect upon
becoming law.