Full Text of HB2204 103rd General Assembly
HB2204sam001 103RD GENERAL ASSEMBLY | Sen. David Koehler Filed: 5/24/2023
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| 1 | | AMENDMENT TO HOUSE BILL 2204
| 2 | | AMENDMENT NO. ______. Amend House Bill 2204 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Hydrogen Fuel Replacement Tax Credit Act. | 6 | | Section 5. Legislative findings; purpose. The General | 7 | | Assembly finds that: | 8 | | (1) the health, welfare, and prosperity of all | 9 | | Illinois residents require that the State of Illinois act | 10 | | to reduce carbon emissions and other air pollutants in the | 11 | | State; | 12 | | (2) the State currently invests in a variety of | 13 | | strategies to reduce carbon emissions and other air | 14 | | pollutants, including, but not limited to, strategies that | 15 | | encourage the use of renewable energy, nuclear energy, | 16 | | energy efficient processes, and low-emission vehicles; |
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| 1 | | (3) qualifying hydrogen can be produced through the | 2 | | electrolysis of water using electricity generated by | 3 | | emissions-free energy sources; | 4 | | (4) replacing fossil fuels and hydrogen produced from | 5 | | fossil
fuels with qualifying hydrogen can reduce carbon | 6 | | emissions and other air pollutants and benefit the | 7 | | environment and public health of this State; and | 8 | | (5) qualifying hydrogen should be used only where it | 9 | | will reduce carbon emissions and other air pollutants and | 10 | | should primarily be used to replace hydrogen that is not | 11 | | qualifying hydrogen or in sectors where direct | 12 | | electrification is infeasible. | 13 | | This Act is intended to encourage the replacement of | 14 | | fossil fuels and hydrogen produced from fossil fuels with | 15 | | qualifying hydrogen for the purposes of promoting | 16 | | decarbonization and improving the State's air quality. | 17 | | Section 10. Definitions. As used in this Act: | 18 | | "Attestation" means a statement that is made under penalty | 19 | | of perjury by a producer under Section 27. | 20 | | "Department" means the Department of Commerce and Economic | 21 | | Opportunity. | 22 | | "Eligible taxpayer" means a taxpayer that: | 23 | | (1) is subject to subsections (a) and (b) of Section | 24 | | 201 of the Illinois Income Tax Act; | 25 | | (2) has eligible qualifying hydrogen use for which the |
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| 1 | | producer has provided an attestation and verification | 2 | | under Section 27; | 3 | | (3) complies with subsections (e) and (f) of Section | 4 | | 15 if applicable; and | 5 | | (4) is allocated credits by the Department under | 6 | | Section 25. | 7 | | If the taxpayer is an
individual, partnership, trust, | 8 | | estate, or Subchapter S corporation, then the taxpayer is an | 9 | | eligible taxpayer only to the
extent that the taxpayer's | 10 | | Illinois income tax liability is due to
an equity interest in a | 11 | | partnership that uses qualifying hydrogen, a Subchapter S | 12 | | corporation that uses qualifying hydrogen,
or a similar | 13 | | pass-through entity that uses qualifying hydrogen. | 14 | | "Eligible qualifying hydrogen use" means the use, in | 15 | | Illinois, of qualifying hydrogen, except for the use of | 16 | | qualifying hydrogen in the following sectors or for the | 17 | | following purposes: | 18 | | (1) the use of qualifying hydrogen in all vehicles | 19 | | powered by combustion engines or in vehicles in classes 1, | 20 | | 2, 3, 4, 5, and 6 in the 8-category Gross Vehicle Weight | 21 | | Rating (GVWR) classification system, where Class 1 | 22 | | includes vehicles with a GVWR of less than 6,000 pounds | 23 | | (lbs); Class 2 includes vehicles with a GVWR of 6,001 to | 24 | | 10,000 lbs; Class 3 includes vehicles with a GVWR of | 25 | | 10,001 to 14,000 lbs; Class 4 includes vehicles with a | 26 | | GVWR of 14,001 to 16,000 lbs; Class 5 includes vehicles |
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| 1 | | with a GVWR of 16,001 to 19,500 lbs; Class 6 includes | 2 | | vehicles with a GVWR of 19,501 to 26,000 lbs; Class 7 | 3 | | includes vehicles with a GVWR of 26,001 to 33,000 lbs; and | 4 | | Class 8 includes vehicles with a GVWR of greater than | 5 | | 33,001 lbs; | 6 | | (2) the use of qualifying hydrogen in heating or | 7 | | cooking in residential and commercial buildings, including | 8 | | space heating, water heating, and clothes drying, or in | 9 | | other cases where qualifying hydrogen is blended into the | 10 | | gas distribution system of a residential or commercial | 11 | | building; and | 12 | | (3) the use of qualifying hydrogen for the production | 13 | | of electricity generated using direct gas combustion, | 14 | | except when that use is (A) for the purpose of emissions | 15 | | reductions to achieve compliance with any rules or | 16 | | regulations promulgated by the United States Environmental | 17 | | Protection Agency, as interpreted and applied in State | 18 | | Implementation Plans under those rules and regulations, | 19 | | and (B) undertaken pursuant to an approved State | 20 | | Implementation Plan for the State of Illinois. | 21 | | "Environmental attribute credit" means a renewable energy | 22 | | credit, zero-emission credit, or carbon mitigation credit, as | 23 | | those terms are defined in Sections 1-10 and 1-75 of the | 24 | | Illinois Power Agency Act, or any other environmental | 25 | | attribute credit tracked by the Generation Attribute Tracking | 26 | | System administered by PJM Interconnection, LLC. |
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| 1 | | "Equity investment eligible community" has the meaning | 2 | | provided in Section 5-5 of the Energy Transition Act. | 3 | | "MISO" means Midcontinent Independent System Operator, | 4 | | Inc. | 5 | | "MISO maximum generation event" has the same meaning as in | 6 | | MISO's Reliability Operating Procedures. | 7 | | "PJM" means PJM Interconnection, LLC, the regional | 8 | | transmission organization (RTO) that coordinates the movement | 9 | | of wholesale electricity for portions of 13 states, including | 10 | | Illinois. | 11 | | "PJM performance assessment interval" has the same meaning | 12 | | as provided in the PJM Open Access Transmission Tariff. | 13 | | "Producer" means a producer of qualifying hydrogen. | 14 | | "Qualified renewable energy resource" means an electric | 15 | | generator
that (1) is fueled by wind, solar thermal energy, | 16 | | photovoltaic cells
and panels, geothermal energy, or | 17 | | hydropower that does not involve new
construction or | 18 | | significant expansion of hydropower dams; and (2)
produces | 19 | | renewable energy credits that are eligible to be counted
| 20 | | toward the renewable energy requirements in subsection (c) of | 21 | | Section
1-75 of the Illinois Power Agency Act. | 22 | | "Qualifying hydrogen" means hydrogen that (i) receives | 23 | | 100% of the tax credit available under 26 U.S.C. 45V and (ii) | 24 | | meets the requirements of Section 27 of this Act. If any of the | 25 | | requirements of 26 U.S.C. 45v conflict with any of the | 26 | | requirements of Section 27, then the relevant requirement of |
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| 1 | | Section 27 shall govern for purposes of determining | 2 | | eligibility for the allowable credit established under this | 3 | | Act. | 4 | | "Regional grid" means the territory served by a specific | 5 | | regional
transmission organization. | 6 | | "Regional transmission organization" means PJM | 7 | | Interconnection,
LLC; Midcontinent Independent System | 8 | | Operator; or any other entity
charged with regional real-time | 9 | | balancing of electricity generation
and load. | 10 | | "Zero-emission facility" has the same meaning as provided | 11 | | in Section 1-10 of the Illinois Power Agency Act as that Act | 12 | | exists on the effective date of this Act. | 13 | | Section 15. Allowable credit. | 14 | | (a) For tax years ending on or after December 31, 2027 and | 15 | | beginning before January 1, 2029, a credit is allowed against | 16 | | the taxes imposed on an eligible taxpayer under subsections | 17 | | (a) and (b) of Section 201 of the Illinois Income Tax Act in an | 18 | | amount equal to $1 per kilogram of eligible qualifying | 19 | | hydrogen used by the eligible taxpayer during the immediately | 20 | | preceding calendar year. If the use of the qualifying hydrogen | 21 | | by a taxpayer occurs in or impacts one or more equity | 22 | | investment eligible communities, then, to be eligible for this | 23 | | credit, the taxpayer must submit to the Department and make | 24 | | publicly available documentation that demonstrates that the | 25 | | use has led to a net reduction of negative environmental |
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| 1 | | impacts in each impacted equity investment eligible community | 2 | | and demonstrates that all application requirements detailed in | 3 | | this Act, including those in subsection (c), have been met for | 4 | | the year in which the credit is sought. Those impacts shall | 5 | | include direct, indirect, and cumulative impacts, including, | 6 | | but not limited to, impacts from using, transporting, and | 7 | | storing qualifying hydrogen, and impacts to air, water, | 8 | | traffic, noise, and public health. This documentation must be | 9 | | specific, quantifiable, measurable, and verifiable. Continued | 10 | | receipt of tax credits is contingent upon the taxpayer making | 11 | | this demonstration each year. Failure to demonstrate a | 12 | | reduction of negative environmental impacts in each impacted | 13 | | equity investment eligible community shall result in the | 14 | | denial or forfeiture of tax credits. | 15 | | (b) The allowable credit provided in subsection (a) of | 16 | | this Section shall be increased by $0.15 per kilogram of | 17 | | eligible qualifying hydrogen for eligible qualifying hydrogen | 18 | | use impacting one or more equity investment eligible | 19 | | communities if an eligible taxpayer specifically, | 20 | | quantifiably, and verifiably demonstrates that the eligible | 21 | | qualifying hydrogen use satisfies both of the following | 22 | | criteria for the preceding tax year: | 23 | | (1) The eligible taxpayer's project workforce meets | 24 | | the minimum equity standards for equity eligible persons | 25 | | and equity eligible contractors determined by the Illinois | 26 | | Power Agency pursuant to subsection (c-10) of Section 1-75 |
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| 1 | | of the Illinois Power Agency Act. This requirement shall | 2 | | apply to both construction employment and ongoing | 3 | | employment in areas such as, but not limited to, | 4 | | operations, production, and maintenance. | 5 | | (2) At least 40% of the total benefits provided by the | 6 | | use are received by the equity investment eligible | 7 | | communities impacted by the eligible qualifying hydrogen | 8 | | use. Benefits to be considered shall include, but are not | 9 | | limited to: a decrease in the percentage of household | 10 | | income spent on energy costs; a decrease in environmental | 11 | | exposures and burdens; an increase in access to low-cost | 12 | | capital; an increase in employment and job training for | 13 | | residents; an increase in clean energy enterprise creation | 14 | | and contracting; increases in community energy ownership; | 15 | | increased parity in clean energy technology and adoption; | 16 | | and an increase in energy resilience. As used in this item | 17 | | (2), "energy resilience" means the ability to operate | 18 | | energy services in response to a major disruption. | 19 | | Employment and contracting benefits provided pursuant to | 20 | | paragraph (1) shall count toward this 40% requirement. | 21 | | (c) The Department shall develop an application process | 22 | | for tax credits under this Section that provides meaningful, | 23 | | timely, and effective public notice of a tax credit | 24 | | application to members of impacted communities, accounting for | 25 | | linguistic needs and other relevant characteristics, and | 26 | | provides meaningful opportunity for public comment on any tax |
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| 1 | | credit application. The public notice and tax credit | 2 | | application shall be translated into non-English languages in | 3 | | impacted communities where a language other than English is | 4 | | widely spoken. The notice must, at a minimum, include all of | 5 | | the following: the name of the applicant, the location of the | 6 | | use, a brief description of the use and its impacts, and a link | 7 | | to a website where the application and more detailed | 8 | | information on the use and its impacts can be found. The notice | 9 | | shall be written at a third or fourth grade reading level to | 10 | | ensure ease of understanding for all members of the public. | 11 | | The opportunity for public comment must, at a minimum, include | 12 | | a public meeting held in a location within an impacted equity | 13 | | investment community and easily accessible to residents of | 14 | | other impacted equity investment eligible communities. Such | 15 | | public meeting shall be held not less than 30 days after public | 16 | | notice is provided and not less than 30 days before a decision | 17 | | is made on the application. The Department shall consider | 18 | | comments received when determining whether the requirements of | 19 | | this Section have been met. Applications, supporting | 20 | | materials, and comments submitted with respect to applications | 21 | | shall be maintained on the Department website in a publicly | 22 | | accessible manner. | 23 | | (d) An eligible taxpayer may not earn tax credits for a tax | 24 | | year for eligible qualifying hydrogen use in an amount that | 25 | | exceeds the amount of tax credit allocated to it for the tax | 26 | | year under Section 25. If the amount of the credit exceeds the |
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| 1 | | tax liability for the year, the excess may be carried forward | 2 | | and applied to the tax liability of the 5 taxable years | 3 | | following the excess credit year. The credit shall be applied | 4 | | to the earliest year for which there is a tax liability. If | 5 | | there are credits from more than one tax year that are | 6 | | available to offset a liability, the earlier credit shall be | 7 | | applied first. In no event shall a credit under this Section | 8 | | reduce the taxpayer's liability to less than zero. | 9 | | (e) Labor performed on or after the effective date of this | 10 | | Act to convert the eligible taxpayer's existing equipment or | 11 | | to install new equipment for the eligible taxpayer to enable | 12 | | eligible qualifying hydrogen use for which a credit is claimed | 13 | | under this Act shall be performed by general contractors that | 14 | | enter into a project labor agreement, as defined by the | 15 | | Illinois Power Agency Act, prior to construction. The project | 16 | | labor agreement shall be filed with the Department. | 17 | | (f) Notwithstanding any provision of law to the contrary, | 18 | | any eligible taxpayer receiving tax credits under this Act | 19 | | shall be required to enter into a labor peace agreement with | 20 | | any bona fide labor organization that represents or is | 21 | | attempting to represent any of its employees. | 22 | | Section 20. Credit availability; applications. | 23 | | (a) The total amount of tax credits that may be allocated | 24 | | by the Department to taxpayers for eligible qualifying | 25 | | hydrogen use occurring in a calendar year shall not exceed |
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| 1 | | $10,000,000 per year, plus the amount of tax credits that were | 2 | | available under this Section to be allocated for eligible | 3 | | qualifying hydrogen use in the immediately preceding calendar | 4 | | year but were not allocated. | 5 | | (b) In order to qualify for a tax credit under this Act, | 6 | | the applicant must apply with the Department on a form | 7 | | prescribed by the Department by rule. The application shall | 8 | | contain information necessary to calculate the tax credit and | 9 | | any additional information required by the Department. | 10 | | (c) Upon satisfactory review of the application, the | 11 | | Department shall issue a tax credit certificate to the | 12 | | applicant stating the amount of the tax credit to which the | 13 | | applicant is entitled. The certificate shall be attached to | 14 | | the applicant's income tax return under the Illinois Income | 15 | | Tax Act. | 16 | | Section 25. Credit allocation by the Department. | 17 | | (a) As part of its application under Section 20, the | 18 | | taxpayer shall certify to the Department the amount of | 19 | | eligible qualifying hydrogen, in kilograms, used during the | 20 | | immediately preceding calendar year for which the application | 21 | | is filed. | 22 | | (b) The Department shall notify each taxpayer of the | 23 | | dollar amount of credit allocated to that taxpayer under this | 24 | | Act. The taxpayer must notify the Department within 30 days | 25 | | after the notification by the Department under this subsection |
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| 1 | | (b) if it wishes to surrender its allocation. | 2 | | (c) In each State fiscal year for which tax credits are | 3 | | available pursuant to this Act, the Department shall not | 4 | | allocate more than 10% of the total amount of tax credits | 5 | | available under this Act to the use of qualifying hydrogen for | 6 | | electricity generation that uses direct gas combustion. | 7 | | (d) Subject to the limitations of this Section and | 8 | | Sections 20 and 30, the amount of the credit allocated to a | 9 | | taxpayer by the Department in subsection (b) of this Section | 10 | | shall be the maximum credit that the taxpayer is permitted to | 11 | | earn for the calendar year. | 12 | | (e) Allocations may not be rolled forward to a subsequent | 13 | | year. | 14 | | Section 27. Attestation and verification required. | 15 | | (a) Each taxpayer seeking credits under this Act shall | 16 | | submit with its application for credits under this Act an | 17 | | attestation from the producer, made under penalty of perjury. | 18 | | The attestation shall
also confirm that the hydrogen for which | 19 | | a tax credit is claimed has
not been produced during an | 20 | | applicable PJM performance assessment
interval or an | 21 | | applicable MISO maximum generation event. Each taxpayer | 22 | | seeking credits under this Act shall also be
required to | 23 | | submit to the Department, at the time of the tax filing for
the | 24 | | applicable year, documentation verifying the facts set forth | 25 | | in the
attestation required by this Section. |
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| 1 | | (b) Each taxpayer seeking credits under this Act shall | 2 | | submit with its application for credits under this Act | 3 | | documentation verifiably demonstrating that the hydrogen use | 4 | | or uses for which the tax credit is sought was entirely used | 5 | | for an eligible qualifying hydrogen use, as defined in Section | 6 | | 10 of this Act. | 7 | | (c) Each taxpayer seeking credits under this Act shall | 8 | | submit with its application for credits under this Act | 9 | | verifiable documentation of the following information, to be | 10 | | provided to the taxpayer by the producer:
| 11 | | (i) the type of power generation used to produce the | 12 | | qualifying hydrogen during each hour that the qualifying | 13 | | hydrogen was produced, if this information is available;
| 14 | | (ii) the year or years in which the power generation | 15 | | source or sources identified in item (i) went into | 16 | | operation;
| 17 | | (iii) if the power generation identified in item (i) | 18 | | would have been curtailed or otherwise would not have | 19 | | occurred but for the production of qualifying hydrogen, to | 20 | | the extent determined by PJM, MISO, or another grid | 21 | | operator; and
| 22 | | (iv) to the extent available, the marginal emissions | 23 | | intensity of the regional grid in the same location where | 24 | | the qualifying hydrogen was produced during each hour that | 25 | | the qualifying hydrogen was produced, as determined by the | 26 | | marginal fuel type reported by PJM, MISO, or another grid |
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| 1 | | operator, as appropriate, and an average emissions | 2 | | intensity for that fuel. | 3 | | Section 30. Prioritization of tax credit allocation. If | 4 | | the total amount of tax credits sought by taxpayers under | 5 | | Section 25 exceeds the total amount of tax credits that are | 6 | | allowed to be allocated under Section 20, the Department shall | 7 | | prioritize allocation as follows: | 8 | | (1) Up to 90% of the tax credits shall be allocated to | 9 | | the following eligible
taxpayers in proportion to their | 10 | | requested allocation up to their requested allocation: | 11 | | (A) taxpayers who participate in a United States
| 12 | | Department of Energy Hydrogen Hub for their associated
| 13 | | eligible qualifying hydrogen use; | 14 | | (B) taxpayers who purchase hydrogen
from a | 15 | | participant in a United States Department of Energy
| 16 | | Hydrogen Hub for their associated qualifying hydrogen | 17 | | use; or | 18 | | (C) taxpayers who purchase electricity to produce | 19 | | and use
qualifying hydrogen from a participant in a | 20 | | United States
Department of Energy Hydrogen Hub for | 21 | | their associated
eligible qualifying hydrogen use. | 22 | | (2) Next, any remaining credits shall be allocated to
| 23 | | eligible taxpayers who do not qualify under paragraph (1); | 24 | | however, if there are insufficient remaining credits | 25 | | available to make the allocations under this paragraph |
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| 1 | | (2), then the remaining credits shall be allocated in | 2 | | proportion to the requested allocation up to the eligible | 3 | | taxpayer's requested allocation. | 4 | | (3) Next, any remaining credits shall be allocated
to | 5 | | taxpayers in proportion to their requested allocation, up | 6 | | to their requested allocation,
excluding any amount | 7 | | already allocated to a taxpayer
pursuant to subsections | 8 | | (1) and (2) of this Section.
| 9 | | (4) Finally, any remaining credits shall be allocated | 10 | | to taxpayers receiving an allocation pursuant to | 11 | | subsection (1) in proportion to their requested | 12 | | allocation, such that the allocation provided under | 13 | | subsection (1) and subsection (4) combined does not exceed | 14 | | their requested allocation. | 15 | | Section 35. Transfer of credits. A transfer of credits | 16 | | earned under this Act may be made, in accordance with rules | 17 | | adopted by the Department, by the taxpayer earning the credits | 18 | | within one year after the credits are awarded. The Department | 19 | | shall issue a certificate of transfer to each transferor and | 20 | | transferee, identifying the amount of the credit transferred. | 21 | | The transfer certificate shall be attached to the transferor's | 22 | | and transferee's income tax return under the Illinois Income | 23 | | Tax Act. | 24 | | Section 36. Analysis of hydrogen production and |
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| 1 | | utilization. | 2 | | (a) No later than April 1, 2028, the Illinois | 3 | | Environmental Protection Agency, in consultation with the | 4 | | Department, the Illinois Power Agency, the Illinois Commerce | 5 | | Commission, and other State agencies, as needed, shall publish | 6 | | a report analyzing the greenhouse gas and copollutant | 7 | | emissions impacts of hydrogen production and utilization in | 8 | | the State from January 1, 2026 through December 31, 2027. The | 9 | | report shall separately measure each of the following: | 10 | | (1) life-cycle greenhouse gas and copollutant emission | 11 | | impacts of producing qualifying hydrogen; | 12 | | (2) life-cycle greenhouse gas and copollutant emission | 13 | | impacts of eligible qualifying hydrogen use for which an | 14 | | eligible taxpayer receives a credit under this Act; | 15 | | (3) any greenhouse gas and copollutant emissions | 16 | | avoided by eligible use of qualifying hydrogen, such as by | 17 | | displacing diesel in long-haul, heavy-duty trucking and | 18 | | displacing hydrogen created using fossil fuel feedstock or | 19 | | through electrolysis powered by fossil-fuel generated | 20 | | electricity, where avoidance can be determined with | 21 | | reasonable certainty; and | 22 | | (4) economic activity and jobs attributable to | 23 | | investments in qualifying hydrogen production and eligible | 24 | | qualifying hydrogen use in the State across sectors. | 25 | | The report shall also include the following separate | 26 | | provisions: |
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| 1 | | (1) an analysis of opportunities to increase the | 2 | | production of qualifying hydrogen from electrolysis that | 3 | | is powered entirely by electricity generated from | 4 | | qualified renewable energy resources in the State;
| 5 | | (2) a comparison of the cost of qualifying hydrogen to | 6 | | the cost of hydrogen produced from fossil fuels;
| 7 | | (3) an analysis of whether energy sources other than | 8 | | hydrogen are available alternatives for qualified uses, | 9 | | and if so, whether those alternatives would achieve | 10 | | greater emissions reductions, economic savings, or both; | 11 | | (4) an analysis of the efficacy of this tax credit at | 12 | | incentivizing the transition of industries with eligible | 13 | | uses to use clean hydrogen as a means of decarbonization; | 14 | | (5) an analysis of Illinois' competitiveness in the | 15 | | clean hydrogen economy relative to other states; this | 16 | | analysis shall include, but not be limited to, a review of | 17 | | the Department of Energy's Hydrogen Hub awards, other | 18 | | states' incentives for clean hydrogen, the amount of | 19 | | eligible use of clean hydrogen in Illinois relative to | 20 | | other states, and the amount of production of clean | 21 | | hydrogen in Illinois relative to other states; this | 22 | | analysis should also recommend policy changes the State | 23 | | can make to be more competitive with other states in the | 24 | | clean hydrogen economy to the extent that such | 25 | | competitiveness is consistent with the State's emissions | 26 | | reductions goals and is economically beneficial;
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| 1 | | (6) an analysis of areas where clean hydrogen use, | 2 | | clean energy use, or both can increase emissions | 3 | | reduction, and policy measures the State can take to | 4 | | incentivize those uses, including, but not limited to, an | 5 | | extension of this tax credit and changes to the total | 6 | | annual amount of this tax credit;
and | 7 | | (7) an analysis of the expected arc of production, | 8 | | relative costs of different methods of hydrogen | 9 | | production, relative costs and emissions reductions | 10 | | benefits of clean energy produced by other methods, | 11 | | including renewables, for eligible and other uses to help | 12 | | right-size the total tax credit amount.
| 13 | | The Illinois Environmental Protection Agency may consider | 14 | | application and attestation information provided by eligible | 15 | | taxpayers pursuant to this Act and any other data it deems | 16 | | relevant. | 17 | | Data relied upon for the report and methods of measurement | 18 | | shall be identified in the report and be made publicly | 19 | | available in easily accessible, machine-readable format. | 20 | | The Illinois Environmental Protection Agency shall | 21 | | determine and state in its report the impact of the production | 22 | | of qualifying hydrogen and eligible qualifying hydrogen uses | 23 | | receiving a tax credit pursuant to this Act on greenhouse gas | 24 | | and copollutant emissions. | 25 | | (b) A draft of the report shall be made available for | 26 | | public comment no less than 30 days prior to its final |
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| 1 | | publication. The final report and comments received shall be | 2 | | made publicly available in both English and Spanish, and | 3 | | copies of the final report shall be filed with the General | 4 | | Assembly and the Governor. | 5 | | Section 37. Rules. The Department may adopt rules to | 6 | | implement and administer this Act. | 7 | | Section 40. Severability. If any provision of this Act or | 8 | | its
application to any person or circumstance is held invalid, | 9 | | the invalidity
of that provision or application does not | 10 | | affect other provisions or
applications of this Act that can | 11 | | be given effect without the invalid
provision or application. | 12 | | Section 900. The Illinois Income Tax Act is amended by | 13 | | adding Section 240 as follows: | 14 | | (35 ILCS 5/240 new) | 15 | | Sec. 240. Hydrogen fuel replacement tax credits. | 16 | | (a) For tax years ending on or after December 31, 2027 and | 17 | | beginning before January 1, 2029, an eligible taxpayer who | 18 | | qualifies for a credit under the Hydrogen Fuel Replacement Tax | 19 | | Credit Act is entitled to a credit against the taxes imposed | 20 | | under subsections (a) and (b) of Section 201 of this Act as | 21 | | provided in that Act. If the eligible taxpayer is a | 22 | | partnership or Subchapter S corporation, the credit shall be |
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| 1 | | allowed to the partners or shareholders in accordance with the | 2 | | determination of income and distributive share of income under | 3 | | Sections 702 and 704 and Subchapter S of the Internal Revenue | 4 | | Code. | 5 | | (b) If the amount of the credit exceeds the tax liability | 6 | | for the year, the excess may be carried forward and applied to | 7 | | the tax liability of the 5 taxable years following the excess | 8 | | credit year. The credit shall be applied to the earliest year | 9 | | for which there is a tax liability. If there are credits from | 10 | | more than one tax year that are available to offset a | 11 | | liability, the earlier credit shall be applied first. In no | 12 | | event shall a credit under this Section reduce the taxpayer's | 13 | | liability to less than zero. | 14 | | (c) A sale, assignment, or transfer of the tax credit may | 15 | | be made by the taxpayer earning the credit within one year | 16 | | after the credit is awarded in accordance with rules adopted | 17 | | by the Department of Commerce and Economic Opportunity. | 18 | | (d) A person claiming the credit allowed under this | 19 | | Section shall attach to its Illinois income tax return a copy | 20 | | of the tax credit certificate or the transfer certificate | 21 | | issued by the Department of Commerce and Economic Opportunity.
| 22 | | Section 999. Effective date. This Act takes effect upon | 23 | | becoming law.".
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