Bill Text: IL SB1656 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Creates the Renewable Chemical Production Tax Credit Program Act. Provides a credit against taxes imposed under the Illinois Income Tax Act for eligible businesses that produces a renewable chemical in this State from biomass feedstock. Provides eligibility requirements and for the amount and applicability of the credit. Defines terms. Effective immediately.

Sponsorship: Slight Partisan Bill (Republican 2-1)

Status: (Failed) 2019-01-09 - Session Sine Die [SB1656 Detail]

Download: Illinois-2017-SB1656-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB1656 Introduced 2/9/2017, by Sen. Andy Manar - Chapin Rose SYNOPSIS AS INTRODUCED:
New Act
Creates the Renewable Chemical Production Tax Credit Program Act. Provides a credit against taxes imposed under the Illinois Income Tax Act for eligible businesses that produces a renewable chemical in this State from biomass feedstock. Provides eligibility requirements and for the amount and applicability of the credit. Defines terms. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Renewable Chemical Production Tax Credit Program Act.
Section 5. Definitions. As used in this Act:
"Biobased content percentage" means, with respect to any
renewable chemical, the amount, expressed as a percentage, of
renewable organic material present as determined by testing
representative samples using the ASTM International Standard
D6866, or its successor standard.
"Biomass feedstock" means sugar, polysaccharide, crude
glycerin, lignin, fat, grease, or oil derived from a plant or
animal, or a protein capable of being converted to a building
block chemical by means of a biological or chemical conversion
process.
"Building block chemical" means a molecule converted from
biomass feedstock as a first product or a secondarily derived
product that can be further refined into a higher-value
chemical, material, or consumer product. "Building block
chemical" includes but is not limited to high-purity glycerol,
oleic acid, lauric acid, methanoic or formic acid, arabonic
acid, erythonic acid, glyceric acid, glycolic acid, lactic

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acid, 3-hydroxypropionate, propionic acid, malonic acid,
serine, succinic acid, fumaric acid, malic acid, aspartic acid,
3-hydroxybutyrolactone, acetoin, threonine, itaconic acid,
furfural, levulinic acid, glutamic acid, xylonic acid, xylaric
acid, xylitol, arabitol, citric acid, aconitic acid,
5-hydroxymethylfurfural, lysine, gluconic acid, glucaric acid,
sorbitol, gallic acid, ferulic acid, nonfuel butanol, nonfuel
ethanol, or such additional molecules as may be included by the
Department by rule after consultation with appropriate experts
from the Department of Agricultural and Biological
Engineering, or its successor department, of the College of
Agricultural, Consumer, and Environmental Sciences, of the
University of Illinois.
"Crude glycerin" means glycerin with a purity level below
95%.
"Department" means the Department of Commerce and Economic
Opportunity.
"Eligible business" means a business meeting the
requirements of Section 10.
"Food additive" means a building block chemical that is not
primarily consumed as food but which, when combined with other
components, improves the taste, appearance, odor, texture, or
nutritional content of food. The Department, in its discretion,
shall determine whether or not a building block chemical is
primarily consumed as food.
"High-purity glycerol" means glycerol with a purity level

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of 95%.
"Pre-eligibility production threshold" means, with respect
to each eligible business, the number of pounds of renewable
chemicals produced, if any, by an eligible business during the
calendar year prior to the calendar year in which the business
first qualified as an eligible business pursuant to Section 10.
"Program" means the renewable chemical production tax
credit program administered pursuant to this part.
"Renewable chemical" means a building block chemical with a
biobased content percentage of at least fifty percent.
"Renewable chemical" does not include a chemical sold or used
for the production of food, feed, or fuel. "Renewable chemical"
includes cellulosic ethanol, starch ethanol, or other ethanol
derived from biomass feedstock, fatty acid methyl esters, or
butanol, but only to the extent that such molecules are
produced and sold for uses other than food, feed, or fuel.
"Renewable chemical" also includes a building block chemical
that can be a food additive as long as the building block
chemical is not primarily consumed as food and is also sold for
uses other than food. "Renewable chemical" also includes
supplements, vitamins, nutraceuticals, and pharmaceuticals,
but only to the extent that such molecules do not provide
caloric value so as to be considered sustenance as food or
feed.
"Sugar" means the organic compound glucose, fructose,
xylose, arabinose, lactose, sucrose, starch, cellulose, or

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hemicellulose.
Section 10. Eligibility requirements. To be eligible to
receive the renewable chemical production tax credit pursuant
to the program, a business shall meet all of the following
requirements:
(1) The business is physically located in this State.
(2) The business is operated for profit and under
single management.
(3) The business is not an entity providing
professional services, health care services, or medical
treatments or an entity engaged primarily in retail
operations.
(4) The business organized, expanded, or located in the
State on or after the effective date of this Act.
(5) The business shall not be relocating or reducing
operations within the State.
(6) The business is in compliance with all agreements
entered into under this program or other programs
administered by the Department.
Section 15. Eligible business application and agreement;
maximum tax credits.
(a) An eligible business that produces a renewable chemical
in this State from biomass feedstock during a calendar year may
apply to the Department for the renewable chemical production

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tax credit provided in Section 20. The application shall be
made to the Department in the manner prescribed by the
Department. The application shall be made during the calendar
year following the calendar year in which the renewable
chemicals are produced. The Department may accept applications
on a continuous basis or may establish, by rule, an annual
application deadline.
(b) The application shall include all of the following
information:
(1) The amount of renewable chemicals produced in the
State from biomass feedstock by the eligible business
during the calendar year, measured in pounds.
(2) Any other information reasonably required by the
Department in order to establish and verify eligibility
under the program.
(c) Before being issued a tax credit under Section 20, an
eligible business shall enter into an agreement with the
Department for the successful completion of all requirements of
the program. As part of the agreement, the eligible business
shall agree to collect and provide any information reasonably
required by the Department in order to allow the Department to
fulfill its reporting obligation under Section 25.
(1) An eligible business shall fulfill all the
requirements of the program and the agreement before
receiving a tax credit or entering into a subsequent
agreement under this Section. The Department may decline to

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enter into a subsequent agreement under this Section or
issue a tax credit if an agreement is not successfully
fulfilled.
(2) Upon establishing that all requirements of the
program and the agreement have been fulfilled, the
Department shall issue a tax credit and related tax credit
certificate to the eligible business stating the amount of
renewable chemical production tax credit the eligible
business may claim.
(d) The maximum amount of tax credit that may be issued
under Section 20 to an eligible business for the production of
renewable chemicals in a calendar year shall not exceed the
following:
(1) In the case of an eligible business that has been
in operation in the State for five years or less at the
time of application, one million dollars.
(2) In the case of an eligible business that has been
in operation in the State for more than five years at the
time of application, five hundred thousand dollars.
An eligible business shall not receive a tax credit for
renewable chemicals produced before the date the business first
qualified as an eligible business pursuant to Section 10. An
eligible business shall only receive a tax credit for renewable
chemicals produced in a calendar year to the extent such
production exceeds the eligible business's pre-eligibility
production threshold. An eligible business shall not receive

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more than 5 tax credits under the program.
The Department shall issue tax credits under the program on
a first-come, first-served basis until the maximum amount of
$25,000,000 of tax credits are allocated in any given calendar
year. The Department shall maintain a list of successful
applicants under the program, so that if the maximum aggregate
amount of tax credits is reached in a given year, eligible
businesses that successfully applied but for which tax credits
were not issued shall be placed on a wait list in the order the
eligible businesses applied and shall be given priority for
receiving tax credits in succeeding years. Placement on a wait
list pursuant to this subsection (d) shall not constitute a
promise binding the State. The availability of a tax credit and
issuance of a tax credit certificate pursuant to this
subsection (d) in a future year is contingent upon the
availability of tax credits in that particular year.
(e) The failure by an eligible business in fulfilling any
requirement of the program or any of the terms and obligations
of an agreement entered into pursuant to this Section may
result in the reduction, termination, or rescission of the tax
credits under Section 20 and may subject the eligible business
to the repayment or recapture of tax credits claimed.
(f) Except as provided in this subsection (f), any
information or record in the possession of the Department with
respect to the program shall be presumed by the Department to
be a protected trade secret protected and shall be kept

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confidential by the Department unless otherwise ordered by a
court. The identity of a tax credit recipient and the amount of
the tax credit shall be considered public information.
Section 20. Renewable chemical production tax credit.
(a) An eligible business that has entered into an agreement
pursuant to Section 15 may claim a tax credit in an amount
equal to the product of five cents multiplied by the number of
pounds of renewable chemicals produced in this State from
biomass feedstock by the eligible business during the calendar
year in excess of the eligible business's pre-eligibility
production threshold. However, an eligible business shall not
receive a tax credit for the production of a secondarily
derived building block chemical if that chemical is also the
subject of a credit at the time of production as a first
product. The renewable chemical production tax credit shall not
be available for any renewable chemical produced before the
2018 calendar year.
(b) The tax credit shall be allowed against taxes imposed
on corporations under the Illinois Income Tax Act.
(c) The tax credit shall be claimed for the tax year during
which the eligible business was issued the tax credit.
(d) An individual may claim a tax credit under this Section
of a partnership, limited liability company, S corporation,
cooperative organized under chapter 501 and filing as a
partnership for federal tax purposes, estate, or trust electing

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to have income taxed directly to the individual. The amount
claimed by the individual shall be based upon the pro rata
share of the individual's earnings from the partnership,
limited liability company, S corporation, cooperative, estate,
or trust.
(e) For any tax credit in excess of the tax liability, the
taxpayer may elect to have the overpayment shown on the
taxpayer's final, completed return credited to the tax
liability for the following tax year.
(f) To claim a tax credit under this Section, a taxpayer
shall include one or more tax credit certificates with the
taxpayer's tax return. The tax credit certificate shall contain
the taxpayer 's name, address, tax identification number, the
amount of the credit, the name of the eligible business, and
any other information required by the Department of Revenue.
The tax credit certificate, unless rescinded by the Department,
shall be accepted by the Department of Revenue as payment for
taxes imposed pursuant to the Illinois Income Tax Act, subject
to any conditions or restrictions placed by the Department upon
the face of the tax credit certificate and subject to the
limitations of the program. Tax credit certificates issued
pursuant to this Section shall not be transferred to any other
person.
Section 25. Reports to General Assembly.
(a) For purposes of this Section, "successful tax credit

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applicant" includes, with respect to each calendar year, an
eligible business that was issued a tax credit for production
of renewable chemicals during that calendar year, and an
eligible business that successfully applied for a tax credit
for the production of renewable chemicals during that calendar
year, but was not issued a tax credit and was instead placed on
the wait list provided under subsection (d) of Section 15.
(b) By January 31, 2019, and by January 31 of each year
thereafter, the Department, in cooperation with the Department
of Revenue, shall submit to the General Assembly and the
Governor a report describing the activities of the program for
the most recent calendar year for which the tax credit
application period has ended pursuant to subsection (a) of
Section 15. The report shall at a minimum include the following
information:
(1) The aggregate number of pounds, and a list of each
type, of renewable chemicals produced in Illinois by all
successful tax credit applicants during the calendar year
prior to the calendar year for which the successful
applicants first applied for a tax credit under the
program.
(2) The aggregate number of pounds, and a list of each
type, of renewable chemicals produced in Illinois by all
successful tax credit applicants during each calendar
year.
(3) The aggregate sales of all renewable chemicals

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produced by all successful tax credit applicants in each
calendar year for which there are at least five successful
tax credit applicants.
(4) The aggregate number of pounds, and a list of each
type, of biomass feedstock used in the production of
renewable chemicals in Illinois by all successful tax
credit applicants during the calendar year prior to the
calendar year for which the successful applicants first
applied for a tax credit under the program.
(5) The aggregate number of pounds, and a list of each
type, of biomass feedstock used in the production of
renewable chemicals in Illinois by all successful tax
credit applicants during each calendar year.
(6) The number of employees located in Illinois of all
successful tax credit applicants during the calendar year
prior to the calendar year for which the successful
applicants first applied for a tax credit under the
program.
(7) The number of employees located in Illinois of all
successful tax credit applicants during each calendar
year.
(8) The number and aggregate amount of tax credits
issued under the program for each calendar year.
(9) The number of eligible businesses placed on the
wait list for each calendar year, and the total number of
eligible businesses remaining on the wait list at the end

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of that calendar year.
(10) The dollar amount of tax credit claims placed on
the wait list for each calendar year, and the total dollar
amount of tax credit claims remaining on the wait list at
the end of that calendar year.
(11) For each eligible business issued a renewable
chemical production tax credit during each calendar year:
(A) The identity of the eligible business.
(B) The amount of the tax credit.
(C) The manner in which the eligible business first
qualified as an eligible business under paragraph (4)
of Section 10, whether by organizing, expanding, or
locating in the State.
(12) The total amount of all renewable chemical
production tax credits claimed during each calendar year,
and the portion of the claims issued as refunds.
(c) To protect the presumption of confidentiality
established in subsection (f) of Section 15, the Department
shall report all information in an aggregate form to prevent,
as much as possible, information being attributable to any
particular eligible business, except as provided in paragraph
(11) of subsection (b) of this Section.
Section 30. Rules. The Department and the Illinois
Department of Revenue shall each adopt rules as necessary for
the implementation and administration of this Act.

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Section 35. Repeal. This Act is repealed on January 1,
2024.
Section 99. Effective date. This Act takes effect upon
becoming law.