Section 110.10  Purpose and Scope

 

a)         The purpose of the Illinois Industrial Coal Utilization Program is to increase the environmentally sound use of Illinois Coal by Illinois manufacturers and industries. (Section 9 of the Build Illinois Bond Act as amended by P.A. 84-1070, effective November 27, 1985, hereafter sometimes referred to as "the Act").

 

b)         The Department is authorized to use monies deposited in the Illinois Industrial Coal Utilization Fund, the Build Illinois Purposes Fund or the Build Illinois Bond Fund, subject to appropriation, and to accept guarantees from individuals, partnerships, joint ventures, corporations and governmental agencies for the purpose of implementing a revolving loan program to partially finance new coal burning facilities or conversion of existing facilities to Illinois Coal use.

 

c)         The Department, subject to the approval of the Illinois Coal Development Board, is authorized to make below market rate loans available for Industrial Coal Projects.  Any loan or series of loans shall be limited to an amount not to exceed the lesser of $2,500,000 or 25% of the Total Project Cost.

 

Section 110.20  Definitions

 

            "Act" means the Build Illinois Bond Act, as may be amended from time to time.  (P.A. 84-111, effective July 25, 1985 as amended by P.A. 84-1070 effective November 27, 1985).

 

            "Additional Financing" is the amount of financing needed from other sources which when added to State Financing shall equal the Total Project Cost as stated on the loan application.

 

            "Applicant" means any manufacturer or industry doing business in Illinois who has submitted a written application to the Department for participation in the Illinois Industrial Coal Utilization Program.

 

            "Board" means the Illinois Coal Development Board.

 

            "Borrower" is an Applicant whose application for State Financing has been approved by the Board.

 

            "Department" means the Department of Energy and Natural Resources of the State of Illinois.

 

            "Director" means the Director of the Department of Energy and Natural Resources of the State of Illinois.

 

            "Financial Advisory Committee" is a seven member committee appointed by the Director which shall advise the Department on the financial status of the application.  Six members shall be representatives from the Illinois financial community and one member shall be a representative from the Department.

 

            "Illinois Coal" means coal mined in Illinois.

 

            "Industrial Coal Project", hereinafter sometimes referred to as "Project", means any new environmentally sound coal burning facility sited in Illinois or conversion of existing facility located in Illinois to coal use, in an environmentally sound manner.

 

            "Program" means the Illinois Industrial Coal Utilization Program.

 

            "State Financing" is that portion of Total Project Cost which the Department shall loan to the Borrower, the amount and terms of which have received prior approval of the Board.

 

            "Total Project Cost" means only those estimated capital costs that include expenditures for the planning, engineering, acquisition, construction, improvement and conversion of facilities and equipment which will foster the environmentally sound use of Illinois Coal related to the completion of the Industrial Coal Project as shown on the loan application, but does not include corporate administrative, travel, or promotional costs incurred by the Applicant or other Project participants.

 

Section 110.30  Solicitation of Industrial Coal Projects

 

a)         The Department will issue solicitation(s) for applications to the Program when moneys are available.  Notice of the solicitation for applications shall be published in the official State newspaper and otherwise publicized through press releases, contacting interested parties on the Department's mailing list(s), trade publications, and through other appropriate channels.

 

b)         Applicants shall have forty-five (45) days from the date of announcement of the solicitation to submit their applications to the Department.

 

c)         Notwithstanding Section 110.30(a) of this Part, the Department will accept unsolicited applications for funding under the Program and shall review such applications according to the same guidelines stated in this Part.  Consideration of unsolicited applications shall be made on a first-come first-serve basis, subject to the availability of funds to the Department for the Program.

 

Section 110.40  Application

 

a)         The application shall be in writing and consist of one (1) original and five(5) copies which shall be submitted to:  Manager, Illinois Industrial Coal Utilization Program, Illinois Department of Energy and Natural Resources, 325 W. Adams, Room 300, Springfield, IL 62704.

 

b)         Except as provided in subsection (4) below, each application shall contain categories of information which shall include, but are not limited to, the following:

 

1)         Summary of Proposed Project

 

A)        General description of the Industrial Coal Project.

 

B)        General description of the Applicant including a history of the Applicant's present business, number of employees, days and hours of operation, products, etc., for which the Industrial Coal Project is to be established.

 

C)        Curriculum vitae of the Applicant's project manager, and managers of the Project's engineering, construction and operation.

 

D)        General description of the Project site.

 

E)        Such plans, equipment lists or other documents which contribute to an understanding of the type, structure and general character of the Project.

 

F)         Preliminary engineering and cost estimates for the development, construction or acquisition of new facilities or the modification of existing facilities to be accomplished in the Industrial Coal Project.

 

G)        Estimated Total Project Cost.

 

H)        Project schedule.

 

I)         General description of the expected use of Illinois Coal resulting from the Project, including estimated annual usage and length of commitment to use Illinois Coal.

 

J)         Methods of handling wastes and compliance with existing emission standards.

 

K)        Lists of known permits, licenses and other authorizations as required by governmental agencies or others.

 

L)        Other relevant information which the Applicant wishes the Department to consider in its review of the application.

 

2)         Financial Information

 

A)        Certified financial statements for the previous three years.

 

B)        Projections and forecasts of the next three years' profit and loss statements.

 

C)        Financial statement(s) of Applicant.

 

D)        Curriculum vitae of President, Vice President, Secretary and Treasurer of Applicant.

 

E)        Proposed financing plan.

 

i)          Percentage of Total Project Cost and dollar amount to be provided by State Financing.

 

ii)         Percentage of Total Project Cost to be provided by Additional Financing, identified by source and dollar amount, and percentage contribution to the Project.

 

iii)        Requested length of term of loan.

 

iv)        Certification that the Project would not occur without State Financing.

 

F)         Letter of commitment by Applicant to burn Illinois Coal for a specified period of time.  The Applicant must commit to the use of Illinois Coal for at least the duration of the loan.

 

G)        Financial evaluation(s) of the Applicant and Project completed by the provider(s) of Additional Financing, excluding any confidential business information.

 

H)        Letter of commitment from each provider of Additional Financing.

 

I)         Statement of value of any property and improvements thereto provided or to be provided for the Project by other sources, prepared by an independent Certified Public Accountant.

 

J)         Other relevant information.

 

3)         Certification by Applicant that the information provided is accurate.

 

4)         If the Applicant determines that any of the application contents, as described in subsections (1) and (2) are irrelevant or not applicable to the proposed Industrial Coal Project, the Applicant shall fully explain the reasons for that conclusion.

 

Section 110.50  Application Review Procedures

 

a)         The Department, with assistance from the Financial Advisory Committee, shall evaluate applications for loans and make such evaluations available to the Board.  Evaluation of the loan applications shall be based on, but not limited to, the following criteria: (Section 10 of the Act)

 

1)         The length of time the Applicant will commit to using Illinois Coal in the facility which is modified, acquired or constructed as a result of the Project.  The Applicant must agree to use Illinois Coal for at least the life of the loan as a condition of such loan. (Section 10 of the Act)

 

2)         The total amount of Illinois Coal used. (Section 10 of the Act)

 

3)         The financial feasibility of the Project, the percentage of the Total Project Cost for which State Financing is requested, and the extent to which the Project maximizes the use of private funds or funds from other public sources.  To be financially feasible the Project must have a positive net present value and an internal rate of return equal to or greater than the cost of capital. (Section 10 of the Act)

 

4)         The technical merits of the Project, including but not limited to the effectiveness of the proposed coal-use system in controlling emissions of sulfur dioxide and other pollutants.  The Project's technology must be commercially proven and commercially available. (Section 10 of the Act)

 

5)         The environmental acceptability of the Industrial Coal Project, including the percentage reductions of sulfur dioxide, nitrous oxides and other pollutants. The Industrial Coal Project must comply with all applicable environmental regulations.

 

6)         The type and quantity of fuel displaced by the Industrial Coal Project.

 

7)         The amount of additional loan security provided by the Applicant to the Department, if any.

 

b)         Following its evaluation of the application, the Department shall make a recommendation to the Board regarding the advisability of providing State Financing for the proposed Industrial Coal Project. The Department shall rank the proposals on the above criteria and recommend for funding to the Board the Projects with the lowest cumulative scores.

 

c)         The Department shall use its best efforts to complete the evaluation of applications received and to make its recommendation to the Board in a timely manner.

 

Section 110.60  Determination by the Illinois Coal Development Board

 

a)         The Board shall review the recommendations of the Department and shall have final authority for the approval of State Financing for any Industrial Coal Project.  In making its determination, the Board shall consider the recommendations of the Department and its Financial Advisory Committee, and shall utilize the evaluation criteria set forth in Section 110.50 of these rules.

 

b)         The Applicant shall be promptly notified in writing of the Board's determination.

 

Section 110.70  State Financing

 

a)         The Department allocates State Financing pursuant to the statutory language of the Act, which provides that:

 

"The Department subject to the approval of the Illinois Coal Development Board shall make below market rate loans available to fund a portion of each qualifying [I]ndustrial [C]oal [P]roject." (Section 9 of the Act)

 

b)         The interest rate for State Financing shall be fixed for the period of the loan and shall not exceed 5% per year.  The Department shall annually set the interest rate for all loans that will be issued during the next twelve months based upon the following considerations:

 

1)         current economic conditions;

 

2)         leading interest rate indicators;

 

3)         ability of the State to maximize financial returns to the Illinois Industrial Coal Utilization Fund;

 

4)         potential to sustain the Program through loan repayments;

 

5)         projected availability of other State funds for the Program; and

 

6)         ability of the State to obtain a sufficient number of Applicants for the Program.

 

c)         The period of the loan shall be the term requested by the Applicant, but in any event shall be at least seven years but no longer than ten years.

 

d)         Any loan or series of loans shall be limited to an amount not to exceed the lesser of $2,500,000 or 25% of the Total Project Cost. (Section 9 of the Act)

 

Section 110.80  Loan Agreement

 

After an Industrial Coal Project has been approved by the Board, the Department and the Borrower shall execute a loan agreement.  The loan agreement shall, at a minimum, require a letter of certification from the Borrower's fiscal officer or accountant stating that State Financing shall be applied only to the Industrial Coal Project, as described in the application and approved by the Board.  The agreement shall include a statement signed by the Borrower certifying that it will comply with the terms and conditions of State Financing provided in connection with the Project and the Program.  The loan agreement may specify actions necessary or appropriate to protect the State's interest in the event of default, foreclosure or noncompliance with the terms and conditions of the loan provided under the Program, including the power to sell, dispose, lease or rent, upon terms and conditions deemed to be appropriate by the Department, real or personal property which the Department may receive as a result thereof. (Section 12 of the Act)

 

Section 110.90  Repayment of State Financing

 

a)         The Borrower shall repay State Financing with interest in accordance with the terms and conditions of the agreement between the Borrower and the Department.

 

b)         Funds repaid to the State under this Program shall be placed in the Illinois Industrial Coal Utilization Fund to be used for the purposes of the Program, subject to appropriation.