HB1868 97TH GENERAL ASSEMBLY

LRB097 08479 ASK 48606 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1868

Introduced , by Rep. Frank J. Mautino

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.786 new

Creates the Wind Energy Facilities Deconstruction Act. Requires the owner of a wind energy generation facility to deposit, with the Department of Agriculture, an irrevocable letter of credit and to maintain that letter until the wind energy generation facility has been subjected to deconstruction. Requires each letter of credit to list the Director of Agriculture as the beneficiary. Provides that if a claimant is able to establish that an abandonment has occurred, but that a deconstruction has not occurred within a specified period of time, then the Department shall request payment from the issuer of the letter of credit, deposit the payment in the Wind Energy Deconstruction Fund Trust Account, enter into a deconstruction agreement, and spend moneys in the Account to have the deconstruction performed. Provides that a claimant desiring to make a claim on the Fund shall file with the Department a complaint containing certain elements. Requires the Department to levy an annual fee on commercial wind energy owners that are conducting wind energy generation activities in the State. Requires those fees to be deposited into the Commercial Wind Energy Operations Fund, for use by the Department to cover certain administrative expenses. Amends the State Finance Act to create the Commercial Wind Energy Operations Fund, as a special fund in the State treasury. Effective July 1, 2011.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning wind energy facilities.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Wind Energy Facilities Deconstruction Act.

Section 5. Purposes. The commercial wind energy facilities constructed throughout this State are usually placed, by use of options, licenses, easements, and leases, on land typically used for agricultural purposes and are owned by persons or entities other than the commercial wind energy developers that own the turbines and related facilities and equipment. Because deconstruction of these facilities would be costly for landowners who have granted one of these options, licenses, or easements or entered into one of these leases, it is deemed desirable to provide a means to pay for the deconstruction of these facilities in the event that the commercial wind energy company fails to do so in a timely manner.

Section 10. Definitions. As used in this Act:

"Abandonment" means (i) the failure, for a period of 12 consecutive months, of the commercial wind energy company to operate a wind turbine or related facilities for the purpose for which it was designed and installed or (ii) the failure, for a period of 6 consecutive months, of the commercial wind energy company to pay the landowner moneys owed him or her in accordance with an underlying agreement.

"Administrative decision" has the meaning ascribed to that term in Section 3-101 of the Code of Civil Procedure.

"Agricultural purposes" means the production, on a continuous basis for the preceding 10 years, of agricultural crops, livestock, or both, including, but not limited to, horticultural, viticultural, and aquacultural production.

"Claimant" means a landowner seeking to have a deconstruction of wind energy facilities paid for from the Wind Energy Deconstruction Fund Trust Account and carried out by the Department under a deconstruction agreement.

"Commercial Wind Energy Operations Fund" means a special fund in the State treasury, containing moneys paid to the Department by reason of the commercial wind energy operators' fees, which shall be used by the Department solely for the purpose of defraying and reimbursing administrative and other costs and expenses incurred by the Department in fulfilling its duties under this Act.

"Commercial wind energy operator" means a private commercial enterprise that owns or operates a wind energy conversion facility of equal to or greater than 500 kilowatts in total nameplate generating capacity.

"Commercial wind energy operators' fees" means those moneys paid to the Department by commercial wind energy operators in accordance with this Act.

"Deconstruction" means the removal of a wind energy generation facility from the property of a landowner and the restoration of that property to the condition in which it existed immediately before the construction of the wind energy generation facility, including, but not limited to, the restoration of the soil to the type that it was before construction and the restoration of the topography of the property to its condition before construction; provided, however, that foundations, pads, electrical lines, and any other underground facilities must be removed to a depth of 5 feet below the surface of the ground.

"Deconstruction agreement" means a written agreement between the Department and another party whereby the other party agrees to perform deconstruction of a wind energy facility in accordance with the provisions of this Act.

"Department" means the Illinois Department of Agriculture.

"Director" means the Director of Agriculture or his or her designee.

"Landowner" means any person with an ownership interest in property (i) that is used for agricultural purposes and (ii) that is the subject of an underlying agreement.

"Letter of credit" means a promise by an issuing bank or other financial institution to pay moneys to the Department in the event that the commercial wind energy company applicant for the letter of credit fails to act in accordance with the requirements of this Act relative to the timely deconstruction of wind energy facilities.

"Person" means an individual or entity, including, but not limited to, a sole proprietorship, a partnership, a corporation, a cooperative, an association, a limited liability company, an estate, a trust, or a governmental agency.

"Underlying agreement" means the written or verbal arrangement with a landowner, including, but not limited to, an easement, option, lease, or license, under the terms of which another person has constructed, constructs, or intends to construct a commercial wind energy generation facility on the property of the landowner.

"Wind Energy Deconstruction Fund Trust Account" means a trust account established by the Director that is used for the receipt and disbursement of moneys paid in accordance with the provisions of this Act to the Department by the issuers of letters of credit.

"Wind energy generation facility" means all property of any nature whatsoever comprising an operation designed to harness wind energy and create electricity therefrom, including, but not limited to, turbines, towers, roadways, concrete foundations, transmission lines, and poles, all situated on, under, or over the property of a landowner.

"Wind turbine" means each foundation, tower, blade, and propeller housing, designed for wind energy generation.

Section 15. Department oversight.

(a) The Director has all of the powers necessary and proper to fully and effectively execute the provisions of this Act, has the general duty to implement this Act, and may take any action that may be reasonable or appropriate to enforce this Act and rules adopted under the authority of this Act.

(b) The Department shall adopt rules that are necessary and appropriate for the implementation and administration of this Act.

Section 20. Applicability of the Illinois Administrative Procedure Act; judicial review.

(a) The Illinois Administrative Procedure Act applies to this Act.

(b) Final administrative decisions of the Department are subject to judicial review under Article III of the Code of Civil Procedure and its rules. An action to review a final administrative decision under this Act may be commenced in the Circuit Court of any county in which any part of the transaction that gave rise to the claim and that was the subject of the proceedings before the Department occurred.

Section 25. Deposit of letters of credit.

(a) Every commercial wind energy operator that is the owner of a wind energy generation facility located on land owned in whole or part by another person or entity shall deposit with the Department an irrevocable letter of credit in an amount to be determined by the Department, and shall keep such a letter of credit in full force and effect until all turbines and related wind energy generation facilities have been subjected to deconstruction, as defined in this Act.

(b) In determining the appropriate amount of a letter of credit, which amount must cover deconstruction costs, the Department shall take into account, among other things, the number of wind turbines and related wind energy generation facilities involved, the original construction cost of the wind energy generation facilities, the size and capacity of the wind turbines, the construction method and techniques for the turbines and other wind energy generation facilities, and the amount of salvage value, if any, that might be available to the Department upon deconstruction.

(c) For wind energy generation facilities already constructed or under construction on the effective date of this Act, the commercial wind energy owners of those facilities shall, within 60 days after the effective date of this Act, report to the Department any information reasonably required by the Department to establish the cost and value of those facilities, including, but not limited to, the number of wind turbines, the site plans of the wind energy generation facilities, the size and capacity of those facilities, and the original construction costs of those facilities. Within 90 days after receipt by the Department of all required information, the Department must inform these owners of the required amount of the letter of credit, listing as the beneficiary "The Director of Agriculture, as Trustee", with those moneys being payable to the Department to cover deconstruction costs, all in accordance with this Act, and indicating that the owner must deposit the letter of credit with the Department. Within 15 days after being informed, the owner must deposit the letter of credit with the Department.

(d) For wind energy generation facilities constructed after the effective date of this Act, the commercial wind energy owners shall, before beginning construction of those facilities, provide to the Department the types of information required under subdivision (c) of this Section, and the Department shall have 90 days after receipt of that information to inform the owner of the required amount of the letter of credit, listing as the beneficiary "The Director of Agriculture, as Trustee", with those moneys being payable to the Department for deconstruction, all in accordance with this Act. Within 15 days after being informed, the owner must deposit the letter of credit with the Department.

(e) Each letter of credit shall list as the beneficiary "The Director of Agriculture, as Trustee" and shall, either in the body of that document or in the attached and incorporated documentation, provide satisfactory evidence to the Department that the undertaking of the issuer of the letter of credit for payment on the letter would be fully in accordance with the provisions of this Act.

All issuers of letters of credits shall be banks or other financial institutions deemed financially satisfactory and reputable by the Department.

(f) It shall be the responsibility of all parties to an underlying agreement to report the existence and specific provisions of such an underlying agreement to the Department as soon as reasonably possible after the date of the underlying agreement.

Section 30. Abandonment. Upon an administrative finding in a hearing held by the Department that the circumstances of an abandonment have been proven by a claimant and that a deconstruction of the wind energy generation facilities in question has not been completed satisfactorily after a period of at least 8 months after the date of abandonment, the Director shall do the following:

(1) request payments from the issuer or issuers of the letter of credit for the purpose of paying the costs of deconstruction;

(2) deposit payments received under item (1) of this Section in the Wind Energy Deconstruction Fund Trust Account, in accordance with this Act;

(3) enter into the appropriate deconstruction agreement; and

(4) disburse the moneys in the Wind Energy Deconstruction Fund Trust Account for the deconstruction, in accordance with this Act.

Section 35. Claims.

(a) A claimant desiring to make a claim on the Wind Energy Deconstruction Fund Trust Account shall file, on forms supplied by the Department, a complaint that shall contain at least the following:

(1) the name and address of the claimant as well as further information establishing the fact that the claimant is a landowner as defined in this Act;

(2) the name and address of the owner of the wind energy generation facility in question;

(3) the location of the commercial wind energy generation facility in question;

(4) a detailed and comprehensive statement of the circumstances indicating the time and existence of the abandonment of the commercial wind energy generation facility in question;

(5) a reasonably verifiable showing that deconstruction of the facility has not been carried to a satisfactory conclusion with 8 months after the date of the abandonment;

(6) a request that the funds necessary to perform the deconstruction in a satisfactory manner be sought by the Department from the issuer or issuers of the letters of credit in the Wind Energy Deconstruction Fund Trust Account attributable to the commercial wind energy generation company which has abandoned the facility or facilities;

(7) a request that the Department carry out the deconstruction, in accordance with the definition of that term in Section 10 of this Act;

(8) copies of the underlying agreement; and

(9) any other documentation reasonably required by the Department.

(b) The Department shall hold a hearing within 30 days after it receives a complaint that meets the requirements of subsection (a), and it shall render a decision as to the validity of the claimant's complaint within 30 days after the conclusion of that hearing. In the event of a finding that the complaint is valid, then, within 30 days, the Department shall obtain at least 2 bids from contractors to carry out the specific deconstruction. One bidder must be chosen by the Department within the 60 days after the finding is made, and the Department, within 60 days after the selection of the bidder, must enter into a deconstruction agreement with that bidder for the deconstruction, which must be accomplished within 6 months after the execution of the deconstruction agreement with the bidder.

(c) The Department shall monitor the progress of the deconstruction and provide the necessary supervisory oversight to ensure that the deconstruction is accomplished in accordance with the deconstruction agreement and the provisions of this Act.

(d) The Department may draw upon only irrevocable letters of credit issued by the commercial wind energy generation company that has abandoned the wind energy facility that is the subject of the claim, complaint, and hearing. In addition, the Department may draw down the entire amount of the deconstruction cost from the issuer of the letter of credit at such time as the deconstruction agreement is signed by the Department.

(e) The proceeds from any letter of credit shall not be available for any purposes other than the payment of deconstruction costs under a deconstruction agreement.

Section 40. Commercial wind energy operators' fees; Commercial Wind Energy Operations Fund.

(a) The Department shall levy an annual fee on commercial wind energy owners that are conducting wind energy generation activities in this State. This fee shall be established by rule, but shall be adequate to reimburse the Department for costs and expenses of an administrative nature or otherwise that are incurred or borne by the Department in fulfillment of its obligations and duties under this Act.

(b) By January 15th of each calendar year, the Department shall mail a notice of the fee to each commercial wind energy owner conducting wind energy operations in this State. The amounts due from each wind energy owner shall be due by the next February 15th.

(c) The Commercial Wind Energy Operations Fund is created as a special fund in the State treasury. The Department must deposit the commercial wind energy operators' fees that it collects into the Fund and may draw upon the Fund to pay for administrative costs and other expenses related to the enforcement of this Act as they are incurred.

The Commercial Wind Energy Operations Fund is not subject to sweeps, administrative charges or chargebacks, or any other fiscal or budgetary maneuver that would in any way transfer any amounts from the Fund into any other fund of the State.

Section 55. The State Finance Act is amended by adding Section 5.786 as follows:

(30 ILCS 105/5.786 new)

Sec. 5.786. The Commercial Wind Energy Operations Fund.

Section 99. Effective date. This Act takes effect July 1, 2011.