HB5749 102ND GENERAL ASSEMBLY

LRB102 27242 HLH 38941 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5749

Introduced 11/16/2022, by Rep. Michael J. Zalewski, Margaret Croke and Edgar Gonzalez, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 105/3-87 new
35 ILCS 110/3-72 new

Amends the Use Tax Act and the Service Use Tax Act. Creates a sustainable aviation fuel purchase credit in the amount of $2 per gallon of sustainable aviation fuel purchased.

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Use Tax Act is amended by adding Section 3-87 as follows:

(35 ILCS 105/3-87 new)

Sec. 3-87. Sustainable Aviation Fuel Purchase Credit.

(a) Beginning on or after January 1, 2023 sustainable aviation fuel sold to or used by an air carrier, certified by the carrier to the Department to be used for consumption, shipment, or storage in the conduct of its business as an air common carrier, earns a credit in an amount of $2 per gallon of sustainable aviation fuel purchased. The credit earned shall be referred to the Sustainable Aviation Fuel Credit.

The purchaser of sustainable aviation fuel shall certify to the seller of the aviation fuel that the purchaser is satisfying all or part of its' liability under the Use Tax Act or the Service Use Tax Act that is due on the purchase of aviation fuel by use of the sustainable aviation fuel purchase credit.

The Sustainable Aviation Fuel Purchase Credit certification must be dated and shall include the name and address of the purchaser, the purchaser's registration number, if registered, the credit being applied, and a statement that the State use tax or service use tax liability is being satisfied with the air carrier's accumulated sustainable aviation fuel purchase credit.

A Sustainable Aviation Fuel Purchase Credit certification provided by the air carrier may be used to satisfy the retailer's or serviceman's liability on aviation fuel under the Retailers' Occupation Tax Act or Service Occupation Tax Act for the credit claimed.

(b) As used in this Section:

"Sustainable aviation fuel" means liquid fuel that:

(1) consists of synthesized hydrocarbons and meets the requirements of:

(A) the American Society for Testing and Materials International Standard D7566; or

(B) the Fischer-Tropsch provisions of American Society for Testing and Materials International Standard D1655, Annex A1;

(2) is derived from biomass resources, waste streams, renewable energy sources, or gaseous carbon oxides;

(3) is not derived from palm fatty acid distillates; and

(4) achieves at least a 50% lifecycle greenhouse gas emissions reduction in comparison with petroleum-based jet fuel, as determined by a test that shows:

(A) that the fuel production pathway achieves at least a 50% reduction of the aggregate attributional core lifecycle emissions and the positive induced land use change values under the lifecycle methodology for sustainable aviation fuels adopted by the International Civil Aviation Organization with the agreement of the United States; or

(B) that the fuel production pathway achieves at least a 50% reduction of the aggregate attributional core lifecycle greenhouse gas emissions values and the positive induced land use change values under another methodology that the United States Secretary of Energy, in consultation with the Administrator of the United States Environmental Protection Agency, determines is reflective of the latest scientific understanding of lifecycle greenhouse gas emissions.

(c) This Section is exempt from the provisions of Section 3-90.

Section 10. The Service Use Tax Act is amended by adding Section 3-72 as follows:

(35 ILCS 110/3-72 new)

Sec. 3-72. Sustainable Aviation Fuel Purchase Credit.

(a) Beginning on or after January 1, 2023 sustainable aviation fuel sold to or used by an air carrier, certified by the carrier to the Department to be used for consumption, shipment, or storage in the conduct of its business as an air common carrier, earns a credit in an amount of $2 per gallon of sustainable aviation fuel purchased. The credit earned shall be referred to the Sustainable Aviation Fuel Credit.

The purchaser of sustainable aviation fuel shall certify to the seller of the aviation fuel that the purchaser is satisfying all or part of its' liability under the Use Tax Act or the Service Use Tax Act that is due on the purchase of aviation fuel by use of the sustainable aviation fuel purchase credit.

The Sustainable Aviation Fuel Purchase Credit certification must be dated and shall include the name and address of the purchaser, the purchaser's registration number, if registered, the credit being applied, and a statement that the State use tax or service use tax liability is being satisfied with the air carrier's accumulated sustainable aviation fuel purchase credit.

A Sustainable Aviation Fuel Purchase Credit certification provided by the air carrier may be used to satisfy the retailer's or serviceman's liability on aviation fuel under the Retailers' Occupation Tax Act or Service Occupation Tax Act for the credit claimed.

(b) As used in this Section:

"Sustainable aviation fuel" means liquid fuel that:

(1) consists of synthesized hydrocarbons and meets the requirements of:

(A) the American Society for Testing and Materials International Standard D7566; or

(B) the Fischer-Tropsch provisions of American Society for Testing and Materials International Standard D1655, Annex A1;

(2) is derived from biomass resources, waste streams, renewable energy sources, or gaseous carbon oxides;

(3) is not derived from palm fatty acid distillates; and

(4) achieves at least a 50% lifecycle greenhouse gas emissions reduction in comparison with petroleum-based jet fuel, as determined by a test that shows:

(A) that the fuel production pathway achieves at least a 50% reduction of the aggregate attributional core lifecycle emissions and the positive induced land use change values under the lifecycle methodology for sustainable aviation fuels adopted by the International Civil Aviation Organization with the agreement of the United States; or

(B) that the fuel production pathway achieves at least a 50% reduction of the aggregate attributional core lifecycle greenhouse gas emissions values and the positive induced land use change values under another methodology that the United States Secretary of Energy, in consultation with the Administrator of the United States Environmental Protection Agency, determines is reflective of the latest scientific understanding of lifecycle greenhouse gas emissions.

(c) This Section is exempt from the provisions of Section 3-75.