Full Text of HB2204 103rd General Assembly
HB2204enr 103RD GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 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; | 17 | | (3) qualifying hydrogen can be produced through the | 18 | | electrolysis of water using electricity generated by | 19 | | emissions-free energy sources; | 20 | | (4) replacing fossil fuels and hydrogen produced from | 21 | | fossil
fuels with qualifying hydrogen can reduce carbon | 22 | | emissions and other air pollutants and benefit the | 23 | | environment and public health of this State; and |
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| 1 | | (5) qualifying hydrogen should be used only where it | 2 | | will reduce carbon emissions and other air pollutants and | 3 | | should primarily be used to replace hydrogen that is not | 4 | | qualifying hydrogen or in sectors where direct | 5 | | electrification is infeasible. | 6 | | This Act is intended to encourage the replacement of | 7 | | fossil fuels and hydrogen produced from fossil fuels with | 8 | | qualifying hydrogen for the purposes of promoting | 9 | | decarbonization and improving the State's air quality. | 10 | | Section 10. Definitions. As used in this Act: | 11 | | "Attestation" means a statement that is made under penalty | 12 | | of perjury by a producer under Section 27. | 13 | | "Department" means the Department of Commerce and Economic | 14 | | Opportunity. | 15 | | "Eligible taxpayer" means a taxpayer that: | 16 | | (1) is subject to subsections (a) and (b) of Section | 17 | | 201 of the Illinois Income Tax Act; | 18 | | (2) has eligible qualifying hydrogen use for which the | 19 | | producer has provided an attestation and verification | 20 | | under Section 27; | 21 | | (3) complies with subsections (e) and (f) of Section | 22 | | 15 if applicable; and | 23 | | (4) is allocated credits by the Department under | 24 | | Section 25. | 25 | | If the taxpayer is an
individual, partnership, trust, |
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| 1 | | estate, or Subchapter S corporation, then the taxpayer is an | 2 | | eligible taxpayer only to the
extent that the taxpayer's | 3 | | Illinois income tax liability is due to
an equity interest in a | 4 | | partnership that uses qualifying hydrogen, a Subchapter S | 5 | | corporation that uses qualifying hydrogen,
or a similar | 6 | | pass-through entity that uses qualifying hydrogen. | 7 | | "Eligible qualifying hydrogen use" means the use, in | 8 | | Illinois, of qualifying hydrogen, except for the use of | 9 | | qualifying hydrogen in the following sectors or for the | 10 | | following purposes: | 11 | | (1) the use of qualifying hydrogen in all vehicles | 12 | | powered by combustion engines or in vehicles in classes 1, | 13 | | 2, 3, 4, 5, and 6 in the 8-category Gross Vehicle Weight | 14 | | Rating (GVWR) classification system, where Class 1 | 15 | | includes vehicles with a GVWR of less than 6,000 pounds | 16 | | (lbs); Class 2 includes vehicles with a GVWR of 6,001 to | 17 | | 10,000 lbs; Class 3 includes vehicles with a GVWR of | 18 | | 10,001 to 14,000 lbs; Class 4 includes vehicles with a | 19 | | GVWR of 14,001 to 16,000 lbs; Class 5 includes vehicles | 20 | | with a GVWR of 16,001 to 19,500 lbs; Class 6 includes | 21 | | vehicles with a GVWR of 19,501 to 26,000 lbs; Class 7 | 22 | | includes vehicles with a GVWR of 26,001 to 33,000 lbs; and | 23 | | Class 8 includes vehicles with a GVWR of greater than | 24 | | 33,001 lbs; | 25 | | (2) the use of qualifying hydrogen in heating or | 26 | | cooking in residential and commercial buildings, including |
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| 1 | | space heating, water heating, and clothes drying, or in | 2 | | other cases where qualifying hydrogen is blended into the | 3 | | gas distribution system of a residential or commercial | 4 | | building; and | 5 | | (3) the use of qualifying hydrogen for the production | 6 | | of electricity generated using direct gas combustion, | 7 | | except when that use is (A) for the purpose of emissions | 8 | | reductions to achieve compliance with any rules or | 9 | | regulations promulgated by the United States Environmental | 10 | | Protection Agency, as interpreted and applied in State | 11 | | Implementation Plans under those rules and regulations, | 12 | | and (B) undertaken pursuant to an approved State | 13 | | Implementation Plan for the State of Illinois. | 14 | | "Environmental attribute credit" means a renewable energy | 15 | | credit, zero-emission credit, or carbon mitigation credit, as | 16 | | those terms are defined in Sections 1-10 and 1-75 of the | 17 | | Illinois Power Agency Act, or any other environmental | 18 | | attribute credit tracked by the Generation Attribute Tracking | 19 | | System administered by PJM Interconnection, LLC. | 20 | | "Equity investment eligible community" has the meaning | 21 | | provided in Section 5-5 of the Energy Transition Act. | 22 | | "MISO" means Midcontinent Independent System Operator, | 23 | | Inc. | 24 | | "MISO maximum generation event" has the same meaning as in | 25 | | MISO's Reliability Operating Procedures. | 26 | | "PJM" means PJM Interconnection, LLC, the regional |
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| 1 | | transmission organization (RTO) that coordinates the movement | 2 | | of wholesale electricity for portions of 13 states, including | 3 | | Illinois. | 4 | | "PJM performance assessment interval" has the same meaning | 5 | | as provided in the PJM Open Access Transmission Tariff. | 6 | | "Producer" means a producer of qualifying hydrogen. | 7 | | "Qualified renewable energy resource" means an electric | 8 | | generator
that (1) is fueled by wind, solar thermal energy, | 9 | | photovoltaic cells
and panels, geothermal energy, or | 10 | | hydropower that does not involve new
construction or | 11 | | significant expansion of hydropower dams; and (2)
produces | 12 | | renewable energy credits that are eligible to be counted
| 13 | | toward the renewable energy requirements in subsection (c) of | 14 | | Section
1-75 of the Illinois Power Agency Act. | 15 | | "Qualifying hydrogen" means hydrogen that (i) receives | 16 | | 100% of the tax credit available under 26 U.S.C. 45V and (ii) | 17 | | meets the requirements of Section 27 of this Act. If any of the | 18 | | requirements of 26 U.S.C. 45v conflict with any of the | 19 | | requirements of Section 27, then the relevant requirement of | 20 | | Section 27 shall govern for purposes of determining | 21 | | eligibility for the allowable credit established under this | 22 | | Act. | 23 | | "Regional grid" means the territory served by a specific | 24 | | regional
transmission organization. | 25 | | "Regional transmission organization" means PJM | 26 | | Interconnection,
LLC; Midcontinent Independent System |
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| 1 | | Operator; or any other entity
charged with regional real-time | 2 | | balancing of electricity generation
and load. | 3 | | "Zero-emission facility" has the same meaning as provided | 4 | | in Section 1-10 of the Illinois Power Agency Act as that Act | 5 | | exists on the effective date of this Act. | 6 | | Section 15. Allowable credit. | 7 | | (a) For tax years ending on or after December 31, 2027 and | 8 | | beginning before January 1, 2029, a credit is allowed against | 9 | | the taxes imposed on an eligible taxpayer under subsections | 10 | | (a) and (b) of Section 201 of the Illinois Income Tax Act in an | 11 | | amount equal to $1 per kilogram of eligible qualifying | 12 | | hydrogen used by the eligible taxpayer during the immediately | 13 | | preceding calendar year. If the use of the qualifying hydrogen | 14 | | by a taxpayer occurs in or impacts one or more equity | 15 | | investment eligible communities, then, to be eligible for this | 16 | | credit, the taxpayer must submit to the Department and make | 17 | | publicly available documentation that demonstrates that the | 18 | | use has led to a net reduction of negative environmental | 19 | | impacts in each impacted equity investment eligible community | 20 | | and demonstrates that all application requirements detailed in | 21 | | this Act, including those in subsection (c), have been met for | 22 | | the year in which the credit is sought. Those impacts shall | 23 | | include direct, indirect, and cumulative impacts, including, | 24 | | but not limited to, impacts from using, transporting, and | 25 | | storing qualifying hydrogen, and impacts to air, water, |
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| 1 | | traffic, noise, and public health. This documentation must be | 2 | | specific, quantifiable, measurable, and verifiable. Continued | 3 | | receipt of tax credits is contingent upon the taxpayer making | 4 | | this demonstration each year. Failure to demonstrate a | 5 | | reduction of negative environmental impacts in each impacted | 6 | | equity investment eligible community shall result in the | 7 | | denial or forfeiture of tax credits. | 8 | | (b) The allowable credit provided in subsection (a) of | 9 | | this Section shall be increased by $0.15 per kilogram of | 10 | | eligible qualifying hydrogen for eligible qualifying hydrogen | 11 | | use impacting one or more equity investment eligible | 12 | | communities if an eligible taxpayer specifically, | 13 | | quantifiably, and verifiably demonstrates that the eligible | 14 | | qualifying hydrogen use satisfies both of the following | 15 | | criteria for the preceding tax year: | 16 | | (1) The eligible taxpayer's project workforce meets | 17 | | the minimum equity standards for equity eligible persons | 18 | | and equity eligible contractors determined by the Illinois | 19 | | Power Agency pursuant to subsection (c-10) of Section 1-75 | 20 | | of the Illinois Power Agency Act. This requirement shall | 21 | | apply to both construction employment and ongoing | 22 | | employment in areas such as, but not limited to, | 23 | | operations, production, and maintenance. | 24 | | (2) At least 40% of the total benefits provided by the | 25 | | use are received by the equity investment eligible | 26 | | communities impacted by the eligible qualifying hydrogen |
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| 1 | | use. Benefits to be considered shall include, but are not | 2 | | limited to: a decrease in the percentage of household | 3 | | income spent on energy costs; a decrease in environmental | 4 | | exposures and burdens; an increase in access to low-cost | 5 | | capital; an increase in employment and job training for | 6 | | residents; an increase in clean energy enterprise creation | 7 | | and contracting; increases in community energy ownership; | 8 | | increased parity in clean energy technology and adoption; | 9 | | and an increase in energy resilience. As used in this item | 10 | | (2), "energy resilience" means the ability to operate | 11 | | energy services in response to a major disruption. | 12 | | Employment and contracting benefits provided pursuant to | 13 | | paragraph (1) shall count toward this 40% requirement. | 14 | | (c) The Department shall develop an application process | 15 | | for tax credits under this Section that provides meaningful, | 16 | | timely, and effective public notice of a tax credit | 17 | | application to members of impacted communities, accounting for | 18 | | linguistic needs and other relevant characteristics, and | 19 | | provides meaningful opportunity for public comment on any tax | 20 | | credit application. The public notice and tax credit | 21 | | application shall be translated into non-English languages in | 22 | | impacted communities where a language other than English is | 23 | | widely spoken. The notice must, at a minimum, include all of | 24 | | the following: the name of the applicant, the location of the | 25 | | use, a brief description of the use and its impacts, and a link | 26 | | to a website where the application and more detailed |
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| 1 | | information on the use and its impacts can be found. The notice | 2 | | shall be written at a third or fourth grade reading level to | 3 | | ensure ease of understanding for all members of the public. | 4 | | The opportunity for public comment must, at a minimum, include | 5 | | a public meeting held in a location within an impacted equity | 6 | | investment community and easily accessible to residents of | 7 | | other impacted equity investment eligible communities. Such | 8 | | public meeting shall be held not less than 30 days after public | 9 | | notice is provided and not less than 30 days before a decision | 10 | | is made on the application. The Department shall consider | 11 | | comments received when determining whether the requirements of | 12 | | this Section have been met. Applications, supporting | 13 | | materials, and comments submitted with respect to applications | 14 | | shall be maintained on the Department website in a publicly | 15 | | accessible manner. | 16 | | (d) An eligible taxpayer may not earn tax credits for a tax | 17 | | year for eligible qualifying hydrogen use in an amount that | 18 | | exceeds the amount of tax credit allocated to it for the tax | 19 | | year under Section 25. If the amount of the credit exceeds the | 20 | | tax liability for the year, the excess may be carried forward | 21 | | and applied to the tax liability of the 5 taxable years | 22 | | following the excess credit year. The credit shall be applied | 23 | | to the earliest year for which there is a tax liability. If | 24 | | there are credits from more than one tax year that are | 25 | | available to offset a liability, the earlier credit shall be | 26 | | applied first. In no event shall a credit under this Section |
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| 1 | | reduce the taxpayer's liability to less than zero. | 2 | | (e) Labor performed on or after the effective date of this | 3 | | Act to convert the eligible taxpayer's existing equipment or | 4 | | to install new equipment for the eligible taxpayer to enable | 5 | | eligible qualifying hydrogen use for which a credit is claimed | 6 | | under this Act shall be performed by general contractors that | 7 | | enter into a project labor agreement, as defined by the | 8 | | Illinois Power Agency Act, prior to construction. The project | 9 | | labor agreement shall be filed with the Department. | 10 | | (f) Notwithstanding any provision of law to the contrary, | 11 | | any eligible taxpayer receiving tax credits under this Act | 12 | | shall be required to enter into a labor peace agreement with | 13 | | any bona fide labor organization that represents or is | 14 | | attempting to represent any of its employees. | 15 | | Section 20. Credit availability; applications. | 16 | | (a) The total amount of tax credits that may be allocated | 17 | | by the Department to taxpayers for eligible qualifying | 18 | | hydrogen use occurring in a calendar year shall not exceed | 19 | | $10,000,000 per year, plus the amount of tax credits that were | 20 | | available under this Section to be allocated for eligible | 21 | | qualifying hydrogen use in the immediately preceding calendar | 22 | | year but were not allocated. | 23 | | (b) In order to qualify for a tax credit under this Act, | 24 | | the applicant must apply with the Department on a form | 25 | | prescribed by the Department by rule. The application shall |
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| 1 | | contain information necessary to calculate the tax credit and | 2 | | any additional information required by the Department. | 3 | | (c) Upon satisfactory review of the application, the | 4 | | Department shall issue a tax credit certificate to the | 5 | | applicant stating the amount of the tax credit to which the | 6 | | applicant is entitled. The certificate shall be attached to | 7 | | the applicant's income tax return under the Illinois Income | 8 | | Tax Act. | 9 | | Section 25. Credit allocation by the Department. | 10 | | (a) As part of its application under Section 20, the | 11 | | taxpayer shall certify to the Department the amount of | 12 | | eligible qualifying hydrogen, in kilograms, used during the | 13 | | immediately preceding calendar year for which the application | 14 | | is filed. | 15 | | (b) The Department shall notify each taxpayer of the | 16 | | dollar amount of credit allocated to that taxpayer under this | 17 | | Act. The taxpayer must notify the Department within 30 days | 18 | | after the notification by the Department under this subsection | 19 | | (b) if it wishes to surrender its allocation. | 20 | | (c) In each State fiscal year for which tax credits are | 21 | | available pursuant to this Act, the Department shall not | 22 | | allocate more than 10% of the total amount of tax credits | 23 | | available under this Act to the use of qualifying hydrogen for | 24 | | electricity generation that uses direct gas combustion. | 25 | | (d) Subject to the limitations of this Section and |
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| 1 | | Sections 20 and 30, the amount of the credit allocated to a | 2 | | taxpayer by the Department in subsection (b) of this Section | 3 | | shall be the maximum credit that the taxpayer is permitted to | 4 | | earn for the calendar year. | 5 | | (e) Allocations may not be rolled forward to a subsequent | 6 | | year. | 7 | | Section 27. Attestation and verification required. | 8 | | (a) Each taxpayer seeking credits under this Act shall | 9 | | submit with its application for credits under this Act an | 10 | | attestation from the producer, made under penalty of perjury. | 11 | | The attestation shall
also confirm that the hydrogen for which | 12 | | a tax credit is claimed has
not been produced during an | 13 | | applicable PJM performance assessment
interval or an | 14 | | applicable MISO maximum generation event. Each taxpayer | 15 | | seeking credits under this Act shall also be
required to | 16 | | submit to the Department, at the time of the tax filing for
the | 17 | | applicable year, documentation verifying the facts set forth | 18 | | in the
attestation required by this Section. | 19 | | (b) Each taxpayer seeking credits under this Act shall | 20 | | submit with its application for credits under this Act | 21 | | documentation verifiably demonstrating that the hydrogen use | 22 | | or uses for which the tax credit is sought was entirely used | 23 | | for an eligible qualifying hydrogen use, as defined in Section | 24 | | 10 of this Act. | 25 | | (c) Each taxpayer seeking credits under this Act shall |
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| 1 | | submit with its application for credits under this Act | 2 | | verifiable documentation of the following information, to be | 3 | | provided to the taxpayer by the producer:
| 4 | | (i) the type of power generation used to produce the | 5 | | qualifying hydrogen during each hour that the qualifying | 6 | | hydrogen was produced, if this information is available;
| 7 | | (ii) the year or years in which the power generation | 8 | | source or sources identified in item (i) went into | 9 | | operation;
| 10 | | (iii) if the power generation identified in item (i) | 11 | | would have been curtailed or otherwise would not have | 12 | | occurred but for the production of qualifying hydrogen, to | 13 | | the extent determined by PJM, MISO, or another grid | 14 | | operator; and
| 15 | | (iv) to the extent available, the marginal emissions | 16 | | intensity of the regional grid in the same location where | 17 | | the qualifying hydrogen was produced during each hour that | 18 | | the qualifying hydrogen was produced, as determined by the | 19 | | marginal fuel type reported by PJM, MISO, or another grid | 20 | | operator, as appropriate, and an average emissions | 21 | | intensity for that fuel. | 22 | | Section 30. Prioritization of tax credit allocation. If | 23 | | the total amount of tax credits sought by taxpayers under | 24 | | Section 25 exceeds the total amount of tax credits that are | 25 | | allowed to be allocated under Section 20, the Department shall |
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| 1 | | prioritize allocation as follows: | 2 | | (1) Up to 90% of the tax credits shall be allocated to | 3 | | the following eligible
taxpayers in proportion to their | 4 | | requested allocation up to their requested allocation: | 5 | | (A) taxpayers who participate in a United States
| 6 | | Department of Energy Hydrogen Hub for their associated
| 7 | | eligible qualifying hydrogen use; | 8 | | (B) taxpayers who purchase hydrogen
from a | 9 | | participant in a United States Department of Energy
| 10 | | Hydrogen Hub for their associated qualifying hydrogen | 11 | | use; or | 12 | | (C) taxpayers who purchase electricity to produce | 13 | | and use
qualifying hydrogen from a participant in a | 14 | | United States
Department of Energy Hydrogen Hub for | 15 | | their associated
eligible qualifying hydrogen use. | 16 | | (2) Next, any remaining credits shall be allocated to
| 17 | | eligible taxpayers who do not qualify under paragraph (1); | 18 | | however, if there are insufficient remaining credits | 19 | | available to make the allocations under this paragraph | 20 | | (2), then the remaining credits shall be allocated in | 21 | | proportion to the requested allocation up to the eligible | 22 | | taxpayer's requested allocation. | 23 | | (3) Next, any remaining credits shall be allocated
to | 24 | | taxpayers in proportion to their requested allocation, up | 25 | | to their requested allocation,
excluding any amount | 26 | | already allocated to a taxpayer
pursuant to subsections |
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| 1 | | (1) and (2) of this Section.
| 2 | | (4) Finally, any remaining credits shall be allocated | 3 | | to taxpayers receiving an allocation pursuant to | 4 | | subsection (1) in proportion to their requested | 5 | | allocation, such that the allocation provided under | 6 | | subsection (1) and subsection (4) combined does not exceed | 7 | | their requested allocation. | 8 | | Section 35. Transfer of credits. A transfer of credits | 9 | | earned under this Act may be made, in accordance with rules | 10 | | adopted by the Department, by the taxpayer earning the credits | 11 | | within one year after the credits are awarded. The Department | 12 | | shall issue a certificate of transfer to each transferor and | 13 | | transferee, identifying the amount of the credit transferred. | 14 | | The transfer certificate shall be attached to the transferor's | 15 | | and transferee's income tax return under the Illinois Income | 16 | | Tax Act. | 17 | | Section 36. Analysis of hydrogen production and | 18 | | utilization. | 19 | | (a) No later than April 1, 2028, the Illinois | 20 | | Environmental Protection Agency, in consultation with the | 21 | | Department, the Illinois Power Agency, the Illinois Commerce | 22 | | Commission, and other State agencies, as needed, shall publish | 23 | | a report analyzing the greenhouse gas and copollutant | 24 | | emissions impacts of hydrogen production and utilization in |
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| 1 | | the State from January 1, 2026 through December 31, 2027. The | 2 | | report shall separately measure each of the following: | 3 | | (1) life-cycle greenhouse gas and copollutant emission | 4 | | impacts of producing qualifying hydrogen; | 5 | | (2) life-cycle greenhouse gas and copollutant emission | 6 | | impacts of eligible qualifying hydrogen use for which an | 7 | | eligible taxpayer receives a credit under this Act; | 8 | | (3) any greenhouse gas and copollutant emissions | 9 | | avoided by eligible use of qualifying hydrogen, such as by | 10 | | displacing diesel in long-haul, heavy-duty trucking and | 11 | | displacing hydrogen created using fossil fuel feedstock or | 12 | | through electrolysis powered by fossil-fuel generated | 13 | | electricity, where avoidance can be determined with | 14 | | reasonable certainty; and | 15 | | (4) economic activity and jobs attributable to | 16 | | investments in qualifying hydrogen production and eligible | 17 | | qualifying hydrogen use in the State across sectors. | 18 | | The report shall also include the following separate | 19 | | provisions: | 20 | | (1) an analysis of opportunities to increase the | 21 | | production of qualifying hydrogen from electrolysis that | 22 | | is powered entirely by electricity generated from | 23 | | qualified renewable energy resources in the State;
| 24 | | (2) a comparison of the cost of qualifying hydrogen to | 25 | | the cost of hydrogen produced from fossil fuels;
| 26 | | (3) an analysis of whether energy sources other than |
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| 1 | | hydrogen are available alternatives for qualified uses, | 2 | | and if so, whether those alternatives would achieve | 3 | | greater emissions reductions, economic savings, or both; | 4 | | (4) an analysis of the efficacy of this tax credit at | 5 | | incentivizing the transition of industries with eligible | 6 | | uses to use clean hydrogen as a means of decarbonization; | 7 | | (5) an analysis of Illinois' competitiveness in the | 8 | | clean hydrogen economy relative to other states; this | 9 | | analysis shall include, but not be limited to, a review of | 10 | | the Department of Energy's Hydrogen Hub awards, other | 11 | | states' incentives for clean hydrogen, the amount of | 12 | | eligible use of clean hydrogen in Illinois relative to | 13 | | other states, and the amount of production of clean | 14 | | hydrogen in Illinois relative to other states; this | 15 | | analysis should also recommend policy changes the State | 16 | | can make to be more competitive with other states in the | 17 | | clean hydrogen economy to the extent that such | 18 | | competitiveness is consistent with the State's emissions | 19 | | reductions goals and is economically beneficial;
| 20 | | (6) an analysis of areas where clean hydrogen use, | 21 | | clean energy use, or both can increase emissions | 22 | | reduction, and policy measures the State can take to | 23 | | incentivize those uses, including, but not limited to, an | 24 | | extension of this tax credit and changes to the total | 25 | | annual amount of this tax credit;
and | 26 | | (7) an analysis of the expected arc of production, |
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| 1 | | relative costs of different methods of hydrogen | 2 | | production, relative costs and emissions reductions | 3 | | benefits of clean energy produced by other methods, | 4 | | including renewables, for eligible and other uses to help | 5 | | right-size the total tax credit amount.
| 6 | | The Illinois Environmental Protection Agency may consider | 7 | | application and attestation information provided by eligible | 8 | | taxpayers pursuant to this Act and any other data it deems | 9 | | relevant. | 10 | | Data relied upon for the report and methods of measurement | 11 | | shall be identified in the report and be made publicly | 12 | | available in easily accessible, machine-readable format. | 13 | | The Illinois Environmental Protection Agency shall | 14 | | determine and state in its report the impact of the production | 15 | | of qualifying hydrogen and eligible qualifying hydrogen uses | 16 | | receiving a tax credit pursuant to this Act on greenhouse gas | 17 | | and copollutant emissions. | 18 | | (b) A draft of the report shall be made available for | 19 | | public comment no less than 30 days prior to its final | 20 | | publication. The final report and comments received shall be | 21 | | made publicly available in both English and Spanish, and | 22 | | copies of the final report shall be filed with the General | 23 | | Assembly and the Governor. | 24 | | Section 37. Rules. The Department may adopt rules to | 25 | | implement and administer this Act. |
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| 1 | | Section 40. Severability. If any provision of this Act or | 2 | | its
application to any person or circumstance is held invalid, | 3 | | the invalidity
of that provision or application does not | 4 | | affect other provisions or
applications of this Act that can | 5 | | be given effect without the invalid
provision or application. | 6 | | Section 900. The Illinois Income Tax Act is amended by | 7 | | adding Section 240 as follows: | 8 | | (35 ILCS 5/240 new) | 9 | | Sec. 240. Hydrogen fuel replacement tax credits. | 10 | | (a) For tax years ending on or after December 31, 2027 and | 11 | | beginning before January 1, 2029, an eligible taxpayer who | 12 | | qualifies for a credit under the Hydrogen Fuel Replacement Tax | 13 | | Credit Act is entitled to a credit against the taxes imposed | 14 | | under subsections (a) and (b) of Section 201 of this Act as | 15 | | provided in that Act. If the eligible taxpayer is a | 16 | | partnership or Subchapter S corporation, the credit shall be | 17 | | allowed to the partners or shareholders in accordance with the | 18 | | determination of income and distributive share of income under | 19 | | Sections 702 and 704 and Subchapter S of the Internal Revenue | 20 | | Code. | 21 | | (b) If the amount of the credit exceeds the tax liability | 22 | | for the year, the excess may be carried forward and applied to | 23 | | the tax liability of the 5 taxable years following the excess |
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| 1 | | credit year. The credit shall be applied to the earliest year | 2 | | for which there is a tax liability. If there are credits from | 3 | | more than one tax year that are available to offset a | 4 | | liability, the earlier credit shall be applied first. In no | 5 | | event shall a credit under this Section reduce the taxpayer's | 6 | | liability to less than zero. | 7 | | (c) A sale, assignment, or transfer of the tax credit may | 8 | | be made by the taxpayer earning the credit within one year | 9 | | after the credit is awarded in accordance with rules adopted | 10 | | by the Department of Commerce and Economic Opportunity. | 11 | | (d) A person claiming the credit allowed under this | 12 | | Section shall attach to its Illinois income tax return a copy | 13 | | of the tax credit certificate or the transfer certificate | 14 | | issued by the Department of Commerce and Economic Opportunity.
| 15 | | Section 999. Effective date. This Act takes effect upon | 16 | | becoming law.
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