94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4150

 

Introduced 10/26/2005, by Rep. Kevin Joyce - Thomas Holbrook - William Davis

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 640/2-9
220 ILCS 5/8-403.1   from Ch. 111 2/3, par. 8-403.1

    Amends the Electricity Excise Tax Law. Deletes provisions, applicable through June 30, 2004, requiring the Department of Revenue to pay certain amounts each month into the Public Utility Fund. Beginning on July 1, 2006 and through January 31, 2009, requires the Department to pay certain amounts each month into the Municipal Economic Development Fund. Amends the Public Utilities Act. Prohibits the Illinois Commerce Commission from requiring an electric utility to purchase electricity from any qualified solid waste energy facility (QSWEF) that is owned or operated by an entity that is the subject of a bankruptcy proceeding during the pendency of that proceeding. Provides that, as of the first date on which renewable energy certificates or other saleable representations are sold by a QSWEF, with or without the electricity generated by the facility, to an electric utility or to another electric supplier that is required under State law to comply with a renewable energy portfolio standard or required by order of the Illinois Commerce Commission to meet renewable energy portfolio standard requirement, the QSWEF may not sell electricity and shall be exempt from certain requirements concerning the sale of electricity, but shall remain obligated for certain reimbursements to the State. Provides that certain provisions concerning the sale of electricity by QSWEFs shall remain in full force and effect with respect to a QSWEF that sold electricity at any time before July 1, 2006 and that does not sell or transfer renewable energy certificates or other saleable representations in order to meet the requirements of a renewable energy portfolio standard. Provides that, beginning on July 1, 2006, the Illinois Commerce Commission shall not issue any order determining that a facility is a QSWEF unless it was determined by the Illinois Commerce Commission to be a QSWEF before July 1, 2006. Effective immediately.


LRB094 14609 MKM 49559 b

 

 

A BILL FOR

 

HB4150 LRB094 14609 MKM 49559 b

1     AN ACT concerning utilities.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Electricity Excise Tax Law is amended by
5 changing Section 2-9 as follows:
 
6     (35 ILCS 640/2-9)
7     Sec. 2-9. Return and payment of tax by delivering supplier.
8 Each delivering supplier who is required or authorized to
9 collect the tax imposed by this Law shall make a return to the
10 Department on or before the 15th day of each month for the
11 preceding calendar month stating the following:
12         (1) The delivering supplier's name.
13         (2) The address of the delivering supplier's principal
14     place of business and the address of the principal place of
15     business (if that is a different address) from which the
16     delivering supplier engaged in the business of delivering
17     electricity in this State.
18         (3) The total number of kilowatt-hours which the
19     supplier delivered to or for purchasers during the
20     preceding calendar month and upon the basis of which the
21     tax is imposed.
22         (4) Amount of tax, computed upon Item (3) at the rates
23     stated in Section 2-4.
24         (5) An adjustment for uncollectible amounts of tax in
25     respect of prior period kilowatt-hour deliveries,
26     determined in accordance with rules and regulations
27     promulgated by the Department.
28         (5.5) The amount of credits to which the taxpayer is
29     entitled on account of purchases made under Section 8-403.1
30     of the Public Utilities Act.
31         (6) Such other information as the Department
32     reasonably may require.

 

 

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1     In making such return the delivering supplier may use any
2 reasonable method to derive reportable "kilowatt-hours" from
3 the delivering supplier's records.
4     If the average monthly tax liability to the Department of
5 the delivering supplier does not exceed $2,500, the Department
6 may authorize the delivering supplier's returns to be filed on
7 a quarter-annual basis, with the return for January, February
8 and March of a given year being due by April 30 of such year;
9 with the return for April, May and June of a given year being
10 due by July 31 of such year; with the return for July, August
11 and September of a given year being due by October 31 of such
12 year; and with the return for October, November and December of
13 a given year being due by January 31 of the following year.
14     If the average monthly tax liability to the Department of
15 the delivering supplier does not exceed $1,000, the Department
16 may authorize the delivering supplier's returns to be filed on
17 an annual basis, with the return for a given year being due by
18 January 31 of the following year.
19     Such quarter-annual and annual returns, as to form and
20 substance, shall be subject to the same requirements as monthly
21 returns.
22     Notwithstanding any other provision in this Law concerning
23 the time within which a delivering supplier may file a return,
24 any such delivering supplier who ceases to engage in a kind of
25 business which makes the person responsible for filing returns
26 under this Law shall file a final return under this Law with
27 the Department not more than one month after discontinuing such
28 business.
29     Each delivering supplier whose average monthly liability
30 to the Department under this Law was $10,000 or more during the
31 preceding calendar year, excluding the month of highest
32 liability and the month of lowest liability in such calendar
33 year, and who is not operated by a unit of local government,
34 shall make estimated payments to the Department on or before
35 the 7th, 15th, 22nd and last day of the month during which tax
36 liability to the Department is incurred in an amount not less

 

 

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1 than the lower of either 22.5% of such delivering supplier's
2 actual tax liability for the month or 25% of such delivering
3 supplier's actual tax liability for the same calendar month of
4 the preceding year. The amount of such quarter-monthly payments
5 shall be credited against the final tax liability of such
6 delivering supplier's return for that month. An outstanding
7 credit approved by the Department or a credit memorandum issued
8 by the Department arising from such delivering supplier's
9 overpayment of his or her final tax liability for any month may
10 be applied to reduce the amount of any subsequent
11 quarter-monthly payment or credited against the final tax
12 liability of such delivering supplier's return for any
13 subsequent month. If any quarter-monthly payment is not paid at
14 the time or in the amount required by this Section, such
15 delivering supplier shall be liable for penalty and interest on
16 the difference between the minimum amount due as a payment and
17 the amount of such payment actually and timely paid, except
18 insofar as such delivering supplier has previously made
19 payments for that month to the Department in excess of the
20 minimum payments previously due.
21     If the Director finds that the information required for the
22 making of an accurate return cannot reasonably be compiled by
23 such delivering supplier within 15 days after the close of the
24 calendar month for which a return is to be made, the Director
25 may grant an extension of time for the filing of such return
26 for a period not to exceed 31 calendar days. The granting of
27 such an extension may be conditioned upon the deposit by such
28 delivering supplier with the Department of an amount of money
29 not exceeding the amount estimated by the Director to be due
30 with the return so extended. All such deposits shall be
31 credited against such delivering supplier's liabilities under
32 this Law. If the deposit exceeds such delivering supplier's
33 present and probable future liabilities under this Law, the
34 Department shall issue to such delivering supplier a credit
35 memorandum, which may be assigned by such delivering supplier
36 to a similar person under this Law, in accordance with

 

 

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1 reasonable rules and regulations to be prescribed by the
2 Department.
3     The delivering supplier making the return provided for in
4 this Section shall, at the time of making such return, pay to
5 the Department the amount of tax imposed by this Law.
6     Until October 1, 2002, a delivering supplier who has an
7 average monthly tax liability of $10,000 or more shall make all
8 payments required by rules of the Department by electronic
9 funds transfer. The term "average monthly tax liability" shall
10 be the sum of the delivering supplier's liabilities under this
11 Law for the immediately preceding calendar year divided by 12.
12 Beginning on October 1, 2002, a taxpayer who has a tax
13 liability in the amount set forth in subsection (b) of Section
14 2505-210 of the Department of Revenue Law shall make all
15 payments required by rules of the Department by electronic
16 funds transfer. Any delivering supplier not required to make
17 payments by electronic funds transfer may make payments by
18 electronic funds transfer with the permission of the
19 Department. All delivering suppliers required to make payments
20 by electronic funds transfer and any delivering suppliers
21 authorized to voluntarily make payments by electronic funds
22 transfer shall make those payments in the manner authorized by
23 the Department.
24     Through June 30, 2004, each month the Department shall pay
25 into the Public Utility Fund in the State treasury an amount
26 determined by the Director to be equal to 3.0% of the funds
27 received by the Department pursuant to this Section. Through
28 June 30, 2004, the remainder of all moneys received by the
29 Department under this Section shall be paid into the General
30 Revenue Fund in the State treasury. Beginning on July 1, 2004,
31 of the 3% of the funds received pursuant to this Section, each
32 month the Department shall pay $416,667 into the General
33 Revenue Fund and the balance shall be paid into the Public
34 Utility Fund in the State treasury.
35     Beginning on July 1, 2006 and through January 31, 2009,
36 each month the Department shall pay into the Municipal Economic

 

 

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1 Development Fund in the State treasury an amount equal to the
2 difference, if any, between the total amount received by the
3 Department under subsection (i) of Section 8-403.1 of the
4 Public Utilities Act for the immediately preceding month and
5 the total amount received by the Department under subsection
6 (i) of Section 8-403.1 of the Public Utilities Act for the
7 month in calendar year 2002 corresponding with the immediately
8 preceding month. After making the payments required under this
9 paragraph, the remainder of all moneys received by the
10 Department under Section 8-403.1 of the Public Utilities Act
11 shall be paid into the General Revenue Fund in the State
12 treasury.
13 (Source: P.A. 92-492, eff. 1-1-02; 93-839, eff. 7-30-04.)
 
14     Section 10. The Public Utilities Act is amended by changing
15 Section 8-403.1 as follows:
 
16     (220 ILCS 5/8-403.1)  (from Ch. 111 2/3, par. 8-403.1)
17     Sec. 8-403.1. Electricity purchased from qualified solid
18 waste energy facility; tax credit; distributions for economic
19 development.
20     (a) It is hereby declared to be the policy of this State to
21 encourage the development of alternate energy production
22 facilities in order to conserve our energy resources and to
23 provide for their most efficient use.
24     (b) For the purpose of this Section and Section 9-215.1,
25 "qualified solid waste energy facility" means a facility
26 determined by the Illinois Commerce Commission to qualify as
27 such under the Local Solid Waste Disposal Act, to use methane
28 gas generated from landfills as its primary fuel, and to
29 possess characteristics that would enable it to qualify as a
30 cogeneration or small power production facility under federal
31 law.
32     (c) In furtherance of the policy declared in this Section,
33 the Illinois Commerce Commission shall require electric
34 utilities to enter into long-term contracts to purchase

 

 

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1 electricity from qualified solid waste energy facilities
2 located in the electric utility's service area, for a period
3 beginning on the date that the facility begins generating
4 electricity and having a duration of not less than 10 years in
5 the case of facilities fueled by landfill-generated methane, or
6 20 years in the case of facilities fueled by methane generated
7 from a landfill owned by a forest preserve district. The
8 purchase rate contained in such contracts shall be equal to the
9 average amount per kilowatt-hour paid from time to time by the
10 unit or units of local government in which the electricity
11 generating facilities are located, excluding amounts paid for
12 street lighting and pumping service.
13     (d) Whenever a public utility is required to purchase
14 electricity pursuant to subsection (c) above, it shall be
15 entitled to credits in respect of its obligations to remit to
16 the State taxes it has collected under the Electricity Excise
17 Tax Law equal to the amounts, if any, by which payments for
18 such electricity exceed (i) the then current rate at which the
19 utility must purchase the output of qualified facilities
20 pursuant to the federal Public Utility Regulatory Policies Act
21 of 1978, less (ii) any costs, expenses, losses, damages or
22 other amounts incurred by the utility, or for which it becomes
23 liable, arising out of its failure to obtain such electricity
24 from such other sources. The amount of any such credit shall,
25 in the first instance, be determined by the utility, which
26 shall make a monthly report of such credits to the Illinois
27 Commerce Commission and, on its monthly tax return, to the
28 Illinois Department of Revenue. Under no circumstances shall a
29 utility be required to purchase electricity from a qualified
30 solid waste energy facility at the rate prescribed in
31 subsection (c) of this Section if such purchase would result in
32 estimated tax credits that exceed, on a monthly basis, the
33 utility's estimated obligation to remit to the State taxes it
34 has collected under the Electricity Excise Tax Law. The owner
35 or operator shall negotiate facility operating conditions with
36 the purchasing utility in accordance with that utility's posted

 

 

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1 standard terms and conditions for small power producers. If the
2 Department of Revenue disputes the amount of any such credit,
3 such dispute shall be decided by the Illinois Commerce
4 Commission. Whenever a qualified solid waste energy facility
5 has paid or otherwise satisfied in full the capital costs or
6 indebtedness incurred in developing and implementing the
7 qualified facility, the qualified facility shall reimburse the
8 Public Utility Fund and the General Revenue Fund in the State
9 treasury for the actual reduction in payments to those Funds
10 caused by this subsection (d) in a manner to be determined by
11 the Illinois Commerce Commission and based on the manner in
12 which revenues for those Funds were reduced.
13     (e) The Illinois Commerce Commission shall not require an
14 electric utility to purchase electricity from any qualified
15 solid waste energy facility which is owned or operated by: (i)
16 an entity that is primarily engaged in the business of
17 producing or selling electricity, gas, or useful thermal energy
18 from a source other than one or more qualified solid waste
19 energy facilities or (ii) an entity that is the subject of a
20 bankruptcy proceeding, during the pendency of that proceeding,
21 including any qualified solid waste energy facility that is the
22 subject of a bankruptcy proceeding on the effective date of
23 this amendatory Act of the 94th General Assembly.
24     (f) This Section does not require an electric utility to
25 construct additional facilities unless those facilities are
26 paid for by the owner or operator of the affected qualified
27 solid waste energy facility.
28     (g) The Illinois Commerce Commission shall require that:
29 (1) electric utilities use the electricity purchased from a
30 qualified solid waste energy facility to displace electricity
31 generated from nuclear power or coal mined and purchased
32 outside the boundaries of the State of Illinois before
33 displacing electricity generated from coal mined and purchased
34 within the State of Illinois, to the extent possible, and (2)
35 electric utilities report annually to the Commission on the
36 extent of such displacements.

 

 

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1     (h) Nothing in this Section is intended to cause an
2 electric utility that is required to purchase power hereunder
3 to incur any economic loss as a result of its purchase. All
4 amounts paid for power which a utility is required to purchase
5 pursuant to subparagraph (c) shall be deemed to be costs
6 prudently incurred for purposes of computing charges under
7 rates authorized by Section 9-220 of this Act. Tax credits
8 provided for herein shall be reflected in charges made pursuant
9 to rates so authorized to the extent such credits are based
10 upon a cost which is also reflected in such charges.
11     (i) Beginning in February 1999 and through January 2009,
12 each qualified solid waste energy facility that sells
13 electricity to an electric utility at the purchase rate
14 described in subsection (c) shall file with the Department of
15 Revenue on or before the 15th of each month a form, prescribed
16 by the Department of Revenue, that states the number of
17 kilowatt hours of electricity for which payment was received at
18 that purchase rate from electric utilities in Illinois during
19 the immediately preceding month. This form shall be accompanied
20 by a payment from the qualified solid waste energy facility in
21 an amount equal to six-tenths of a mill ($0.0006) per kilowatt
22 hour of electricity stated on the form. Beginning on the
23 effective date of this amendatory Act of the 92nd General
24 Assembly, a qualified solid waste energy facility must file the
25 form required under this subsection (i) before the 15th of each
26 month regardless of whether the facility received any payment
27 in the previous month. Payments received by the Department of
28 Revenue shall be deposited into the Municipal Economic
29 Development Fund, a trust fund created outside the State
30 treasury. The State Treasurer may invest the moneys in the Fund
31 in any investment authorized by the Public Funds Investment
32 Act, and investment income shall be deposited into and become
33 part of the Fund. Moneys in the Fund shall be used by the State
34 Treasurer as provided in subsection (j). The obligation of a
35 qualified solid waste energy facility to make payments into the
36 Municipal Economic Development Fund shall terminate upon

 

 

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1 either: (1) expiration or termination of a facility's contract
2 to sell electricity to an electric utility at the purchase rate
3 described in subsection (c); or (2) entry of an enforceable,
4 final, and non-appealable order by a court of competent
5 jurisdiction that Public Act 89-448 is invalid. Payments by a
6 qualified solid waste energy facility into the Municipal
7 Economic Development Fund do not relieve the qualified solid
8 waste energy facility of its obligation to reimburse the Public
9 Utility Fund and the General Revenue Fund for the actual
10 reduction in payments to those Funds as a result of credits
11 received by electric utilities under subsection (d).
12     A qualified solid waste energy facility that fails to
13 timely file the requisite form and payment as required by this
14 subsection (i) shall be subject to penalties and interest in
15 conformance with the provisions of the Illinois Uniform Penalty
16 and Interest Act.
17     Every qualified solid waste energy facility subject to the
18 provisions of this subsection (i) shall keep and maintain
19 records and books of its sales pursuant to subsection (c),
20 including payments received from those sales and the
21 corresponding tax payments made in accordance with this
22 subsection (i), and for purposes of enforcement of this
23 subsection (i) all such books and records shall be subject to
24 inspection by the Department of Revenue or its duly authorized
25 agents or employees.
26     When a qualified solid waste energy facility fails to file
27 the form or make the payment required under this subsection
28 (i), the Department of Revenue, to the extent that it is
29 practical, may enforce the payment obligation in a manner
30 consistent with Section 5 of the Retailers' Occupation Tax Act,
31 and if necessary may impose and enforce a tax lien in a manner
32 consistent with Sections 5a, 5b, 5c, 5d, 5e, 5f, 5g, and 5i of
33 the Retailers' Occupation Tax Act. No tax lien may be imposed
34 or enforced, however, unless a qualified solid waste energy
35 facility fails to make the payment required under this
36 subsection (i). Only to the extent necessary and for the

 

 

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1 purpose of enforcing this subsection (i), the Department of
2 Revenue may secure necessary information from a qualified solid
3 waste energy facility in a manner consistent with Section 10 of
4 the Retailers' Occupation Tax Act.
5     All information received by the Department of Revenue in
6 its administration and enforcement of this subsection (i) shall
7 be confidential in a manner consistent with Section 11 of the
8 Retailers' Occupation Tax Act. The Department of Revenue may
9 adopt rules to implement the provisions of this subsection (i).
10     For purposes of implementing the maximum aggregate
11 distribution provisions in subsections (j) and (k), when a
12 qualified solid waste energy facility makes a late payment to
13 the Department of Revenue for deposit into the Municipal
14 Economic Development Fund, that payment and deposit shall be
15 attributed to the month and corresponding quarter in which the
16 payment should have been made, and the Treasurer shall make
17 retroactive distributions or refunds, as the case may be,
18 whenever such late payments so require.
19     (j) The State Treasurer, without appropriation, must make
20 distributions immediately after January 15, April 15, July 15,
21 and October 15 of each year, up to maximum aggregate
22 distributions of $500,000 for the distributions made in the 4
23 quarters beginning with the April distribution and ending with
24 the January distribution, from the Municipal Economic
25 Development Fund to each city, village, or incorporated town
26 that has within its boundaries an incinerator that: (1) uses
27 or, on the effective date of Public Act 90-813, used municipal
28 waste as its primary fuel to generate electricity; (2) was
29 determined by the Illinois Commerce Commission to qualify as a
30 qualified solid waste energy facility prior to the effective
31 date of Public Act 89-448; and (3) commenced operation prior to
32 January 1, 1998. Total distributions in the aggregate to all
33 qualified cities, villages, and incorporated towns in the 4
34 quarters beginning with the April distribution and ending with
35 the January distribution shall not exceed $500,000. The amount
36 of each distribution shall be determined pro rata based on the

 

 

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1 population of the city, village, or incorporated town compared
2 to the total population of all cities, villages, and
3 incorporated towns eligible to receive a distribution.
4 Distributions received by a city, village, or incorporated town
5 must be held in a separate account and may be used only to
6 promote and enhance industrial, commercial, residential,
7 service, transportation, and recreational activities and
8 facilities within its boundaries, thereby enhancing the
9 employment opportunities, public health and general welfare,
10 and economic development within the community, including
11 administrative expenditures exclusively to further these
12 activities. These funds, however, shall not be used by the
13 city, village, or incorporated town, directly or indirectly, to
14 purchase, lease, operate, or in any way subsidize the operation
15 of any incinerator, and these funds shall not be paid, directly
16 or indirectly, by the city, village, or incorporated town to
17 the owner, operator, lessee, shareholder, or bondholder of any
18 incinerator. Moreover, these funds shall not be used to pay
19 attorneys fees in any litigation relating to the validity of
20 Public Act 89-448. Nothing in this Section prevents a city,
21 village, or incorporated town from using other corporate funds
22 for any legitimate purpose. For purposes of this subsection,
23 the term "municipal waste" has the meaning ascribed to it in
24 Section 3.290 of the Environmental Protection Act.
25     (k) If maximum aggregate distributions of $500,000 under
26 subsection (j) have been made after the January distribution
27 from the Municipal Economic Development Fund, then the balance
28 in the Fund shall be refunded to the qualified solid waste
29 energy facilities that made payments that were deposited into
30 the Fund during the previous 12-month period. The refunds shall
31 be prorated based upon the facility's payments in relation to
32 total payments for that 12-month period.
33     (l) Beginning January 1, 2000, and each January 1
34 thereafter, each city, village, or incorporated town that
35 received distributions from the Municipal Economic Development
36 Fund, continued to hold any of those distributions, or made

 

 

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1 expenditures from those distributions during the immediately
2 preceding year shall submit to a financial and compliance and
3 program audit of those distributions performed by the Auditor
4 General at no cost to the city, village, or incorporated town
5 that received the distributions. The audit should be completed
6 by June 30 or as soon thereafter as possible. The audit shall
7 be submitted to the State Treasurer and those officers
8 enumerated in Section 3-14 of the Illinois State Auditing Act.
9 If the Auditor General finds that distributions have been
10 expended in violation of this Section, the Auditor General
11 shall refer the matter to the Attorney General. The Attorney
12 General may recover, in a civil action, 3 times the amount of
13 any distributions illegally expended. For purposes of this
14 subsection, the terms "financial audit," "compliance audit",
15 and "program audit" have the meanings ascribed to them in
16 Sections 1-13 and 1-15 of the Illinois State Auditing Act.
17     (m) On and after the effective date of this amendatory Act
18 of the 94th General Assembly, as of the first date on which
19 renewable energy certificates or other saleable
20 representations are sold or transferred by a qualified solid
21 waste energy facility, with or without the electricity
22 generated by the facility, to an electric utility or to another
23 electric supplier that is required under State law to comply
24 with a renewable energy portfolio standard or that is required
25 by order of the Illinois Commerce Commission to meet a
26 renewable energy portfolio standard requirement, that
27 qualified solid waste energy facility may not sell electricity
28 pursuant to this Section and shall be exempt from the
29 requirements of subsections (a) through (l) of this Section,
30 except that it shall remain obligated for any reimbursements
31 required under subsection (d) of this Section. All of the
32 provisions of this Section shall remain in full force and
33 effect with respect to any qualified solid waste energy
34 facility that sold electric energy pursuant to this Section at
35 any time before July 1, 2006 and that does not sell or transfer
36 renewable energy certificates or other saleable

 

 

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1 representations to meet the requirements of a renewable energy
2 portfolio standard.
3     (n) Notwithstanding any other provision of law to the
4 contrary, beginning on July 1, 2006, the Illinois Commerce
5 Commission shall not issue any order determining that a
6 facility is a qualified solid waste energy facility unless the
7 qualified solid waste energy facility was determined by the
8 Illinois Commerce Commission to be a qualified solid waste
9 energy facility before July 1, 2006.
10 (Source: P.A. 91-901, eff. 1-1-01; 92-435, eff. 8-17-01;
11 92-574, eff. 6-26-02.)
 
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.