Full Text of SB1656 100th General Assembly
SB1656 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB1656 Introduced 2/9/2017, by Sen. Andy Manar - Chapin Rose SYNOPSIS AS INTRODUCED: |
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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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| 1 | | AN ACT concerning revenue.
| 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 | | Renewable Chemical Production Tax Credit Program Act. | 6 | | Section 5. Definitions. As used in this Act: | 7 | | "Biobased content percentage" means, with respect to any | 8 | | renewable chemical, the amount, expressed as a percentage, of | 9 | | renewable organic material present as determined by testing | 10 | | representative samples using the ASTM International Standard | 11 | | D6866, or its successor standard. | 12 | | "Biomass feedstock" means sugar, polysaccharide, crude | 13 | | glycerin, lignin, fat, grease, or oil derived from a plant or | 14 | | animal, or a protein capable of being converted to a building | 15 | | block chemical by means of a biological or chemical conversion | 16 | | process. | 17 | | "Building block chemical" means a molecule converted from | 18 | | biomass feedstock as a first product or a secondarily derived | 19 | | product that can be further refined into a higher-value | 20 | | chemical, material, or consumer product. "Building block | 21 | | chemical" includes but is not limited to high-purity glycerol, | 22 | | oleic acid, lauric acid, methanoic or formic acid, arabonic | 23 | | acid, erythonic acid, glyceric acid, glycolic acid, lactic |
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| 1 | | acid, 3-hydroxypropionate, propionic acid, malonic acid, | 2 | | serine, succinic acid, fumaric acid, malic acid, aspartic acid, | 3 | | 3-hydroxybutyrolactone, acetoin, threonine, itaconic acid, | 4 | | furfural, levulinic acid, glutamic acid, xylonic acid, xylaric | 5 | | acid, xylitol, arabitol, citric acid, aconitic acid, | 6 | | 5-hydroxymethylfurfural, lysine, gluconic acid, glucaric acid, | 7 | | sorbitol, gallic acid, ferulic acid, nonfuel butanol, nonfuel | 8 | | ethanol, or such additional molecules as may be included by the | 9 | | Department by rule after consultation with appropriate experts | 10 | | from the Department of Agricultural and Biological | 11 | | Engineering, or its successor department, of the College of | 12 | | Agricultural, Consumer, and Environmental Sciences, of the | 13 | | University of Illinois. | 14 | | "Crude glycerin" means glycerin with a purity level below | 15 | | 95%. | 16 | | "Department" means the Department of Commerce and Economic | 17 | | Opportunity. | 18 | | "Eligible business" means a business meeting the | 19 | | requirements of Section 10. | 20 | | "Food additive" means a building block chemical that is not | 21 | | primarily consumed as food but which, when combined with other | 22 | | components, improves the taste, appearance, odor, texture, or | 23 | | nutritional content of food. The Department, in its discretion, | 24 | | shall determine whether or not a building block chemical is | 25 | | primarily consumed as food. | 26 | | "High-purity glycerol" means glycerol with a purity level |
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| 1 | | of 95%. | 2 | | "Pre-eligibility production threshold" means, with respect | 3 | | to each eligible business, the number of pounds of renewable | 4 | | chemicals produced, if any, by an eligible business during the | 5 | | calendar year prior to the calendar year in which the business | 6 | | first qualified as an eligible business pursuant to Section 10. | 7 | | "Program" means the renewable chemical production tax | 8 | | credit program administered pursuant to this part. | 9 | | "Renewable chemical" means a building block chemical with a | 10 | | biobased content percentage of at least fifty percent. | 11 | | "Renewable chemical" does not include a chemical sold or used | 12 | | for the production of food, feed, or fuel. "Renewable chemical" | 13 | | includes cellulosic ethanol, starch ethanol, or other ethanol | 14 | | derived from biomass feedstock, fatty acid methyl esters, or | 15 | | butanol, but only to the extent that such molecules are | 16 | | produced and sold for uses other than food, feed, or fuel. | 17 | | "Renewable chemical" also includes a building block chemical | 18 | | that can be a food additive as long as the building block | 19 | | chemical is not primarily consumed as food and is also sold for | 20 | | uses other than food. "Renewable chemical" also includes | 21 | | supplements, vitamins, nutraceuticals, and pharmaceuticals, | 22 | | but only to the extent that such molecules do not provide | 23 | | caloric value so as to be considered sustenance as food or | 24 | | feed. | 25 | | "Sugar" means the organic compound glucose, fructose, | 26 | | xylose, arabinose, lactose, sucrose, starch, cellulose, or |
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| 1 | | hemicellulose. | 2 | | Section 10. Eligibility requirements. To be eligible to | 3 | | receive the renewable chemical production tax credit pursuant | 4 | | to the program, a business shall meet all of the following | 5 | | requirements: | 6 | | (1) The business is physically located in this State. | 7 | | (2) The business is operated for profit and under | 8 | | single management. | 9 | | (3) The business is not an entity providing | 10 | | professional services, health care services, or medical | 11 | | treatments or an entity engaged primarily in retail | 12 | | operations. | 13 | | (4) The business organized, expanded, or located in the | 14 | | State on or after the effective date of this Act. | 15 | | (5) The business shall not be relocating or reducing | 16 | | operations within the State. | 17 | | (6) The business is in compliance with all agreements | 18 | | entered into under this program or other programs | 19 | | administered by the Department. | 20 | | Section 15. Eligible business application and agreement; | 21 | | maximum tax credits. | 22 | | (a) An eligible business that produces a renewable chemical | 23 | | in this State from biomass feedstock during a calendar year may | 24 | | apply to the Department for the renewable chemical production |
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| 1 | | tax credit provided in Section 20. The application shall be | 2 | | made to the Department in the manner prescribed by the | 3 | | Department. The application shall be made during the calendar | 4 | | year following the calendar year in which the renewable | 5 | | chemicals are produced. The Department may accept applications | 6 | | on a continuous basis or may establish, by rule, an annual | 7 | | application deadline. | 8 | | (b) The application shall include all of the following | 9 | | information: | 10 | | (1) The amount of renewable chemicals produced in the | 11 | | State from biomass feedstock by the eligible business | 12 | | during the calendar year, measured in pounds. | 13 | | (2) Any other information reasonably required by the | 14 | | Department in order to establish and verify eligibility | 15 | | under the program. | 16 | | (c) Before being issued a tax credit under Section 20, an | 17 | | eligible business shall enter into an agreement with the | 18 | | Department for the successful completion of all requirements of | 19 | | the program. As part of the agreement, the eligible business | 20 | | shall agree to collect and provide any information reasonably | 21 | | required by the Department in order to allow the Department to | 22 | | fulfill its reporting obligation under Section 25. | 23 | | (1) An eligible business shall fulfill all the | 24 | | requirements of the program and the agreement before | 25 | | receiving a tax credit or entering into a subsequent | 26 | | agreement under this Section. The Department may decline to |
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| 1 | | enter into a subsequent agreement under this Section or | 2 | | issue a tax credit if an agreement is not successfully | 3 | | fulfilled. | 4 | | (2) Upon establishing that all requirements of the | 5 | | program and the agreement have been fulfilled, the | 6 | | Department shall issue a tax credit and related tax credit | 7 | | certificate to the eligible business stating the amount of | 8 | | renewable chemical production tax credit the eligible | 9 | | business may claim. | 10 | | (d) The maximum amount of tax credit that may be issued | 11 | | under Section 20 to an eligible business for the production of | 12 | | renewable chemicals in a calendar year shall not exceed the | 13 | | following: | 14 | | (1) In the case of an eligible business that has been | 15 | | in operation in the State for five years or less at the | 16 | | time of application, one million dollars. | 17 | | (2) In the case of an eligible business that has been | 18 | | in operation in the State for more than five years at the | 19 | | time of application, five hundred thousand dollars. | 20 | | An eligible business shall not receive a tax credit for | 21 | | renewable chemicals produced before the date the business first | 22 | | qualified as an eligible business pursuant to Section 10. An | 23 | | eligible business shall only receive a tax credit for renewable | 24 | | chemicals produced in a calendar year to the extent such | 25 | | production exceeds the eligible business's pre-eligibility | 26 | | production threshold. An eligible business shall not receive |
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| 1 | | more than 5 tax credits under the program. | 2 | | The Department shall issue tax credits under the program on | 3 | | a first-come, first-served basis until the maximum amount of | 4 | | $25,000,000 of tax credits are allocated in any given calendar | 5 | | year. The Department shall maintain a list of successful | 6 | | applicants under the program, so that if the maximum aggregate | 7 | | amount of tax credits is reached in a given year, eligible | 8 | | businesses that successfully applied but for which tax credits | 9 | | were not issued shall be placed on a wait list in the order the | 10 | | eligible businesses applied and shall be given priority for | 11 | | receiving tax credits in succeeding years. Placement on a wait | 12 | | list pursuant to this subsection (d) shall not constitute a | 13 | | promise binding the State. The availability of a tax credit and | 14 | | issuance of a tax credit certificate pursuant to this | 15 | | subsection (d) in a future year is contingent upon the | 16 | | availability of tax credits in that particular year. | 17 | | (e) The failure by an eligible business in fulfilling any | 18 | | requirement of the program or any of the terms and obligations | 19 | | of an agreement entered into pursuant to this Section may | 20 | | result in the reduction, termination, or rescission of the tax | 21 | | credits under Section 20 and may subject the eligible business | 22 | | to the repayment or recapture of tax credits claimed. | 23 | | (f) Except as provided in this subsection (f), any | 24 | | information or record in the possession of the Department with | 25 | | respect to the program shall be presumed by the Department to | 26 | | be a protected trade secret protected and shall be kept |
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| 1 | | confidential by the Department unless otherwise ordered by a | 2 | | court. The identity of a tax credit recipient and the amount of | 3 | | the tax credit shall be considered public information. | 4 | | Section 20. Renewable chemical production tax credit. | 5 | | (a) An eligible business that has entered into an agreement | 6 | | pursuant to Section 15 may claim a tax credit in an amount | 7 | | equal to the product of five cents multiplied by the number of | 8 | | pounds of renewable chemicals produced in this State from | 9 | | biomass feedstock by the eligible business during the calendar | 10 | | year in excess of the eligible business's pre-eligibility | 11 | | production threshold. However, an eligible business shall not | 12 | | receive a tax credit for the production of a secondarily | 13 | | derived building block chemical if that chemical is also the | 14 | | subject of a credit at the time of production as a first | 15 | | product. The renewable chemical production tax credit shall not | 16 | | be available for any renewable chemical produced before the | 17 | | 2018 calendar year. | 18 | | (b) The tax credit shall be allowed against taxes imposed | 19 | | on corporations under the Illinois Income Tax Act. | 20 | | (c) The tax credit shall be claimed for the tax year during | 21 | | which the eligible business was issued the tax credit. | 22 | | (d) An individual may claim a tax credit under this Section | 23 | | of a partnership, limited liability company, S corporation, | 24 | | cooperative organized under chapter 501 and filing as a | 25 | | partnership for federal tax purposes, estate, or trust electing |
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| 1 | | to have income taxed directly to the individual. The amount | 2 | | claimed by the individual shall be based upon the pro rata | 3 | | share of the individual's earnings from the partnership, | 4 | | limited liability company, S corporation, cooperative, estate, | 5 | | or trust. | 6 | | (e) For any tax credit in excess of the tax liability, the | 7 | | taxpayer may elect to have the overpayment shown on the | 8 | | taxpayer's final, completed return credited to the tax | 9 | | liability for the following tax year. | 10 | | (f) To claim a tax credit under this Section, a taxpayer | 11 | | shall include one or more tax credit certificates with the | 12 | | taxpayer's tax return. The tax credit certificate shall contain | 13 | | the taxpayer 's name, address, tax identification number, the | 14 | | amount of the credit, the name of the eligible business, and | 15 | | any other information required by the Department of Revenue. | 16 | | The tax credit certificate, unless rescinded by the Department, | 17 | | shall be accepted by the Department of Revenue as payment for | 18 | | taxes imposed pursuant to the Illinois Income Tax Act, subject | 19 | | to any conditions or restrictions placed by the Department upon | 20 | | the face of the tax credit certificate and subject to the | 21 | | limitations of the program. Tax credit certificates issued | 22 | | pursuant to this Section shall not be transferred to any other | 23 | | person. | 24 | | Section 25. Reports to General Assembly. | 25 | | (a) For purposes of this Section, "successful tax credit |
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| 1 | | applicant" includes, with respect to each calendar year, an | 2 | | eligible business that was issued a tax credit for production | 3 | | of renewable chemicals during that calendar year, and an | 4 | | eligible business that successfully applied for a tax credit | 5 | | for the production of renewable chemicals during that calendar | 6 | | year, but was not issued a tax credit and was instead placed on | 7 | | the wait list provided under subsection (d) of Section 15. | 8 | | (b) By January 31, 2019, and by January 31 of each year | 9 | | thereafter, the Department, in cooperation with the Department | 10 | | of Revenue, shall submit to the General Assembly and the | 11 | | Governor a report describing the activities of the program for | 12 | | the most recent calendar year for which the tax credit | 13 | | application period has ended pursuant to subsection (a) of | 14 | | Section 15. The report shall at a minimum include the following | 15 | | information: | 16 | | (1) The aggregate number of pounds, and a list of each | 17 | | type, of renewable chemicals produced in Illinois by all | 18 | | successful tax credit applicants during the calendar year | 19 | | prior to the calendar year for which the successful | 20 | | applicants first applied for a tax credit under the | 21 | | program. | 22 | | (2) The aggregate number of pounds, and a list of each | 23 | | type, of renewable chemicals produced in Illinois by all | 24 | | successful tax credit applicants during each calendar | 25 | | year. | 26 | | (3) The aggregate sales of all renewable chemicals |
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| 1 | | produced by all successful tax credit applicants in each | 2 | | calendar year for which there are at least five successful | 3 | | tax credit applicants. | 4 | | (4) The aggregate number of pounds, and a list of each | 5 | | type, of biomass feedstock used in the production of | 6 | | renewable chemicals in Illinois by all successful tax | 7 | | credit applicants during the calendar year prior to the | 8 | | calendar year for which the successful applicants first | 9 | | applied for a tax credit under the program. | 10 | | (5) The aggregate number of pounds, and a list of each | 11 | | type, of biomass feedstock used in the production of | 12 | | renewable chemicals in Illinois by all successful tax | 13 | | credit applicants during each calendar year. | 14 | | (6) The number of employees located in Illinois of all | 15 | | successful tax credit applicants during the calendar year | 16 | | prior to the calendar year for which the successful | 17 | | applicants first applied for a tax credit under the | 18 | | program. | 19 | | (7) The number of employees located in Illinois of all | 20 | | successful tax credit applicants during each calendar | 21 | | year. | 22 | | (8) The number and aggregate amount of tax credits | 23 | | issued under the program for each calendar year. | 24 | | (9) The number of eligible businesses placed on the | 25 | | wait list for each calendar year, and the total number of | 26 | | eligible businesses remaining on the wait list at the end |
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| 1 | | of that calendar year. | 2 | | (10) The dollar amount of tax credit claims placed on | 3 | | the wait list for each calendar year, and the total dollar | 4 | | amount of tax credit claims remaining on the wait list at | 5 | | the end of that calendar year. | 6 | | (11) For each eligible business issued a renewable | 7 | | chemical production tax credit during each calendar year: | 8 | | (A) The identity of the eligible business. | 9 | | (B) The amount of the tax credit. | 10 | | (C) The manner in which the eligible business first | 11 | | qualified as an eligible business under paragraph (4) | 12 | | of Section 10, whether by organizing, expanding, or | 13 | | locating in the State. | 14 | | (12) The total amount of all renewable chemical | 15 | | production tax credits claimed during each calendar year, | 16 | | and the portion of the claims issued as refunds. | 17 | | (c) To protect the presumption of confidentiality | 18 | | established in subsection (f) of Section 15, the Department | 19 | | shall report all information in an aggregate form to prevent, | 20 | | as much as possible, information being attributable to any | 21 | | particular eligible business, except as provided in paragraph | 22 | | (11) of subsection (b) of this Section. | 23 | | Section 30. Rules. The Department and the Illinois | 24 | | Department of Revenue shall each adopt rules as necessary for | 25 | | the implementation and administration of this Act. |
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| 1 | | Section 35. Repeal. This Act is repealed on January 1, | 2 | | 2024.
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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