Illinois Incentives and Laws

Last Updated October 2008

Illinois is the home of the Chicago Area Clean Cities Coalition (www.chicagocleancities.org). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Biofuels Production Facility Grants

The Renewable Fuels Development Program provides grants for the construction or expansion of biodiesel and ethanol production facilities in Illinois. Each new facility must have a production capacity of at least 30 million gallons per year and an existing facility must expand its production capacity by at least 30 million gallons per year to be eligible for funding. The total amount of the grant awarded may be up to 10% of the total construction costs of the facility. (Reference 20 Illinois Compiled Statutes 689/5 and 689/15)

Point of Contact

Norm Marek
Illinois Department of Commerce and Economic Opportunity
Illinois State Energy Office
Phone (217) 785-5082
Fax (217) 785-2618
norm.marek@illinois.gov
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/

Clean Diesel Retrofit and Idle Reduction Grants

The Illinois Clean Diesel Grant Program (Program) provides funding for the installation of diesel oxidation catalysts, closed crankcase ventilation systems, particulate matter filters, and anti-idling equipment, including direct-fired heaters and auxiliary power units. In addition, funding may be available for diesel-electric hybrid vehicles. The Program is part of the Illinois Green Fleets Initiative and targets school buses, shuttle buses, diesel vehicles operating in residential areas, and over-the-road trucks located and spending significant driving time in Illinois.

Point of Contact

Darwin Burkhart
Manager, Clean Air Programs
Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition
Phone (217) 524-5008
Fax (217) 557-2559
darwin.burkhart@illinois.gov
http://www.illinoisgreenfleets.org

E85 Fueling Infrastructure Grants

The Illinois E85 Infrastructure Development Program (Program) provides funding to establish new E85 fueling stations at retail gasoline facilities in Illinois. The Program, administered by the Illinois Department of Commerce and Economic Opportunity, will provide up to 50% of the total cost for converting an existing facility to dispense E85 (with a maximum grant of $3,000 per fueling station), or up to 30% of the cost to construct a new E85 fueling station or for a major modification to an existing fueling station (with a maximum grant of up to $30,000 per facility). The Program is currently on hold pending additional funding.

Point of Contact

Norm Marek
Illinois Department of Commerce and Economic Opportunity
Illinois State Energy Office
Phone (217) 785-5082
Fax (217) 785-2618
norm.marek@illinois.gov
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/

Clean School Bus Program

The Illinois Clean School Bus Program provides funding to assist schools and school districts to reduce emissions from diesel-powered school buses through emission control retrofits; bus replacements; implementation of cleaner fuels, including biodiesel, propane, and natural gas; and support for emissions reduction policies, including those related to idle reduction. Funding may be restricted to certain counties with further funding being secured through federal grants and other resources to implement the program on a statewide basis.

Point of Contact

Darwin Burkhart
Manager, Clean Air Programs
Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition
Phone (217) 524-5008
Fax (217) 557-2559
darwin.burkhart@illinois.gov
http://www.illinoisgreenfleets.org

Alternative Fuel Vehicle (AFV) and Alternative Fuel Rebates

The Illinois Alternate Fuels Rebate Program (Program) provides a rebate for 80% of the incremental cost of purchasing an AFV (up to $4,000), 80% of the cost of federally certified AFV conversions (up to $4,000), and for the incremental cost of purchasing alternative fuels. Eligible fuels for the program include E85, diesel fuel blends containing at least 20% biodiesel (B20), natural gas, propane, electricity, and hydrogen. A vehicle is only eligible to receive one rebate in its lifetime. The AFV or conversion system must be purchased from an Illinois-based company or vendor, except if the vehicle is a heavy-duty specialty vehicle that is not sold in Illinois. Only hybrid electric vehicles fueled with alternative fuels are eligible. To be eligible for a fuel rebate, the majority of fuel purchases must be made from Illinois retail stations or fuel suppliers. The E85 fuel rebate is up to $450 per year (depending on vehicle miles traveled) for up to three years for each flexible fuel vehicle that uses E85 at least half the time. The biodiesel fuel rebate (for B20 and higher blends) is for 80% of the incremental cost of the biodiesel fuel, as compared to conventional diesel. The Program is open to all Illinois residents, businesses, government units (except federal government), and organizations located in Illinois. (Reference 415 Illinois Compiled Statutes 120/30)

Point of Contact

Darwin Burkhart
Manager, Clean Air Programs
Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition
Phone (217) 524-5008
Fax (217) 557-2559
darwin.burkhart@illinois.gov
http://www.illinoisgreenfleets.org

Alternative Fuel Vehicle (AFV) Incentives

The Illinois Green Fleets Program recognizes and provides additional marketing opportunities for progressive fleets in Illinois that have a significant number of AFVs and use clean, domestically produced fuels.

Point of Contact

Darwin Burkhart
Manager, Clean Air Programs
Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition
Phone (217) 524-5008
Fax (217) 557-2559
darwin.burkhart@illinois.gov
http://www.illinoisgreenfleets.org

Biofuels Research and Development

The Renewable Fuels Research, Development, and Demonstration Program is administered by the Illinois Department of Commerce and Economic Opportunity. The goals of this program are to promote and expand the use of biofuels such as ethanol and biodiesel as clean, renewable transportation fuels, and accelerate the commercialization of new renewable fuel technologies and products. The Biofuels Business Planning Grant Program, a subsidiary of the Illinois Renewable Fuels Research, Development, and Demonstration Program, provides grants of up to $25,000 for the development of business plans, engineering studies, design studies, permit applications, and legal work for potential new biofuel facilities in Illinois.

Point of Contact

Norm Marek
Illinois Department of Commerce and Economic Opportunity
Illinois State Energy Office
Phone (217) 785-5082
Fax (217) 785-2618
norm.marek@illinois.gov
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/

State Laws and Regulations

Biodiesel Production Tax

Beginning July 1, 2007, if a private biodiesel producer's total biodiesel motor fuel production is less than 5,000 gallons per year, the producer is subject to the annual state motor fuel tax. The return and payment of tax for a given year are due by January 20, of the following year. If the biodiesel producer's total production is 5,000 gallons or more per year, the producer must file returns and make state motor fuel tax payments on a monthly basis. The return and payment of tax are due by the 20th day of each calendar month for the preceding calendar month. A private biodiesel fuel producer is defined as a person whose only activities with respect to motor fuel are: 1) the conversion of any biomass materials into biodiesel fuel, which is produced exclusively for personal use and not for sale; or 2) the blending of biodiesel fuel resulting in biodiesel blends, which is produced exclusively for personal use and not for sale. (Reference 35 Illinois Compiled Statutes 505/2, 505/2a, and 505/2d)

Biofuels Labeling Requirement

Fueling devices that dispense retail biodiesel motor fuel in blends of 5% biodiesel or greater must identify the biodiesel and biodiesel blends by the capital letter "B" followed by the numerical value representing the volume percentage of biodiesel fuel, such as B5, B10, B20, or B100. For devices dispensing motor fuel containing between B5 and B20 blends, either the specific blend must be identified, or a phrase such as "biodiesel blend between 5% and 20%" may be used. For blends above B20, the specific blend must be identified. Specific label format and size requirements apply. Devices dispensing motor fuel containing at least 1% ethanol must also be labeled according to specific labeling and size requirements. (Reference 815 Illinois Compiled Statutes 370/4.1)

Biofuels Education and Promotion

The Promote Illinois Ethanol and Biodiesel Act requires state agencies, including state-supported universities and colleges, to provide links from their Web sites to sites containing information on ethanol and biodiesel fuels. The links must connect to Web sites maintained and operated by state agencies and may also include links to private Web sites. (Reference House Bill 271, 2008, and 505 Illinois Compiled Statutes 150/1)

State Energy Plan

The Green Governments Illinois Act (Act) demonstrates the state's commitment to reducing negative environmental impacts, reducing greenhouse gases, and preserving resources for current and future generations. The Act also aims to strengthen the capacity of units of local government and educational institutions to transition to a more environmentally sustainable future. The Act established the Green Governments Coordinating Council, the purpose of which is to fully integrate cost-effective environmental sustainability measures into the ongoing management systems, long-range planning, and daily operations of state agencies. The Council will initially focus on initiatives that include those related to energy efficiency, renewable energy, and alternative fuel vehicles. Participation in the provisions of the Act by units of local government and educational institutions is voluntary. (Reference 20 Illinois Compiled Statutes 3954/1)

State Energy Independence Plan

The Governor of Illinois developed an energy independence plan that sets a goal of replacing 50% of the state's energy supply with homegrown fuels by 2017. Specifically, in relation to biofuels, the plan will: 1) invest in renewable biofuels by providing financial incentives to build up to 20 new ethanol plants and five new biodiesel plants; and 2) increase the number of gasoline stations that sell biofuels, to ensure that all gasoline stations in the state offer E85 by 2017, and to help the auto industry increase the number of flexible fuel vehicles they produce and increase public awareness about E85.

Global Warming Mitigation Initiative

The Illinois Climate Change Advisory Group was created to provide recommendations to the Office of the Governor regarding climate change policy and the statewide reduction of greenhouse gas emissions. Strategies to address these issues include development of clean, renewable, and homegrown energy resources; and reducing greenhouse gas emissions though the production and use of biofuels and other alternative fuels. (Reference Executive Order 11, 2006 (PDF 29 KB)) Download Adobe Reader

Idle Reduction Requirement

A person that operates a diesel powered motor vehicle in certain counties may not cause or allow the motor vehicle, when it is not in motion, to idle for more than a total of 10 minutes within any 60-minute period. Specified areas include the counties of Cook, DuPage, Lake, Kane, McHenry, Will, Madison, St. Clair, and Monroe, and the townships of Oswego (Kendall County) and Aux Sable and Goose Lake (Grundy County). Exceptions apply, including those pertaining to vehicle weight, traffic, auxiliary power use, and emergency vehicles. (Reference 625 Illinois Compiled Statutes 5/11-1429)

Biodiesel Blend Use Requirement

The following entities are required to use a biodiesel blend that contains at least 2% biodiesel (B2) when refueling at a bulk central fueling facility: any diesel powered vehicle owned or operated by the state, county or local government, school district, community college, public college or university, or mass transit agency. These entities are required to use B2 where available, unless the vehicle engine is designed or retrofitted to operate on a higher percentage of biodiesel or on ultra low sulfur diesel fuel. Biodiesel is defined as a renewable fuel conforming to ASTM standard D6751 and registered with the U.S. Environmental Protection Agency. (Reference 625 Illinois Compiled Statutes 5/12-705.1 and 415 Illinois Compiled Statutes 120/10)

Neighborhood Vehicle Access to Roadways

Neighborhood vehicles may only be operated on streets if authorized by the local government and where the posted speed limit is 35 miles per hour (mph) or less. Neighborhood vehicles are allowed to cross a road or street at an intersection where the road or street has a posted speed limit greater than 35 mph. Neighborhood vehicles are defined as self-propelled, electronically powered, four-wheeled motor vehicles (or a self-propelled, gasoline-powered four-wheeled motor vehicle with an engine displacement under 1,200 cubic centimeters) which are capable of attaining in one mile a speed of more than 20 mph, but not more than 25 mph, and which conform to federal regulations under Title 49 of the Code of Federal Regulations, Part 571.500. (Reference 625 Illinois Compiled Statutes 5/11-1426.1)

State Agency Vehicle Acquisition Priorities and Biofuels Use

The Illinois Department of Central Management Services (CMS) is directed to take all actions necessary to enable the procurement of 2% biodiesel fuel blends (B2) for the state's diesel vehicle fleet and also investigate ways to increase availability of E85 for the state's flexible fuel vehicle (FFV) fleet. The CMS is directed to advise the Illinois Department of Commerce and Economic Opportunity in developing a plan to facilitate the use of E85 and B2 in the state fleet and expand the E85 and biodiesel fueling infrastructure. Additionally, the directors of all executive agencies using the state's fleet of FFVs are directed to implement policies and procedures requiring state employees to use E85 and B2 in state vehicles whenever practical. Furthermore, state agencies are permitted to establish priorities for the acquisition of FFVs, especially hybrid electric vehicles that are capable of using E85, as well as diesel vehicles capable of using biodiesel. (Reference Executive Order 7, 2004 (PDF 113 KB)) Download Adobe Reader

Advanced Vehicle Acquisition and Biodiesel Fuel Use Requirement

All gasoline-powered vehicles purchased from state funds after July 1, 2007, must be flexible fuel vehicles (FFVs) or fuel efficient hybrid electric vehicles (HEVs). FFVs are defined as automobiles or light trucks that operate on either gasoline or E85 (85% ethanol, 15% gasoline). Fuel efficient HEVs are defined as automobiles or light trucks that use a gasoline or diesel engine and an electric motor to provide power and gain at least a 20% increase in combined U.S. Environmental Protection Agency city-highway fuel economy over the equivalent or most-similar conventionally-powered model. Furthermore, any vehicle purchased from state funds that is fueled by diesel fuel must be certified by the manufacturer to run on 5% biodiesel (B5) fuel. The Chief Procurement Officer is permitted to determine that certain vehicle procurements are exempt from these requirements based on intended use or other reasonable considerations such as health and safety of Illinois citizens. (Reference 30 Illinois Compiled Statutes 500/25-75)

Ethanol Tax Exemption

Sales and use taxes do not apply to ethanol-blended fuels containing between 70% and 90% ethanol sold between July 1, 2003, and December 31, 2013. These taxes apply to 100% of the proceeds from sales made thereafter. (Reference 35 Illinois Compiled Statutes 120/2-10, 105/3-10, and 105/3-44)

Biodiesel Tax Exemption

Sales and use taxes apply to 80% of the proceeds from the sale of biodiesel-blended fuels containing between 1% and 10% biodiesel made between July 1, 2003, and December 31, 2013. However, if these taxes are ever imposed at a rate of 1.25%, then the tax on these biodiesel blends will apply to 100% of the proceeds of sales. These taxes do not apply to the proceeds from the sale of biodiesel blends containing more than 10% biodiesel. The taxes will apply to 100% of the proceeds from biodiesel sales made after December 31, 2013. (Reference 35 Illinois Compiled Statutes 120/2-10 and 105/3-10)

Flexible Fuel Vehicle (FFV) Registry

In an effort to support the production of ethanol, and create and expand markets for E85 and other biofuels in the state, the Secretary of State is required to create a database of registered FFVs. The information included in this database should include, but not be limited to, information about the zip code, vehicle make and model, the vehicle identification number of each FFV, and be able to be sorted by the number of vehicles per zip code. The database must be made available to the public in both print and electronic formats. (Reference 415 Illinois Compiled Statutes 120/22)

Fleet User Fee Exemption

An annual user fee of $20 per vehicle is imposed on fleets with 10 or more vehicles in defined areas. Owners of state, county, or local government vehicles or electric vehicles are exempt from this fee. Fees are collected into the Alternate Fuels Fund. (Reference 415 Illinois Compiled Statutes 120/35)

Biofuels Preference for State Vehicle Procurement

In awarding contracts that require procurement of vehicles, state agencies are permitted to give preference to an otherwise qualified bidder who will fulfill the contract through the use of vehicles powered by ethanol produced from Illinois corn or biodiesel fuels produced from Illinois soybeans. (Reference 30 Illinois Compiled Statutes 500/45-60)

State Vehicle Fuel Economy Requirements

State contracts for the purchase or lease of new passenger automobiles must specify the procurement of a vehicle model that can achieve at least the minimum average fuel economy in miles per gallon according to federal Corporate Average Fuel Economy requirements, and the most current mileage study published by the U.S. Environmental Protection Agency. This requirement does not apply to station wagons, vans, four-wheel drive vehicles, and emergency vehicles. Additionally, the state purchasing officer may make exemptions when there is a demonstrated need for a vehicle that does not meet the minimum average fuel economy standards. (Reference 30 Illinois Compiled Statutes 500/45-40)

Corn-to-Ethanol Research Pilot Plant

The Energy Conservation and Coal Development Act was amended to continue the Illinois Ethanol Research Advisory Board's responsibility of managing and operating the National Corn-to-Ethanol Research Center (NCERC) Pilot Plant. The aim of the NCERC Pilot Plant is to reduce the cost of new production technologies, equipment, processes, feedstocks, and new value added co- and by-products. The Illinois Ethanol Research Advisory Board has six main responsibilities:

• Review the annual operating plans and budget of the NCERC Pilot Plant;
• Advise on research and development priorities and projects to be carried out at the NCERC Pilot Plant;
• Advise on policies and procedures regarding the management and operation of the NCERC Pilot Plant (including contracts, project selection, and personnel issues);
• Develop by-laws;
• Submit a final report to the Governor and General Assembly outlining the progress, accomplishments and a financial report for the year; and
• Establish and operate the NCERC at Southern Illinois University at Edwardsville as a State Biorefining Center of Excellence with a focus on areas including the following: performing collaborative research; offering training and educational services; advancing the state biofuels industry; pursuing funding sources; and serving as an independent source for testing and validation.

(Reference 110 Illinois Compiled Statutes 520/6.5 to 520/6.6)

Alternative Fuel Vehicle Labeling Requirement

Vehicles powered by liquefied petroleum gas or compressed natural gas must visibly display identifying decals, as established by the National Fire Protection Association. (Reference 625 Illinois Compiled Statutes 5/12-704.3)

Alternative Fuel Taxicab Regulation - Chicago

Chicago taxi companies with 50 or more vehicles in their fleet as of April 1, 2006, must operate at least one alternative fuel taxi. No more than 2% of the taxi fleet's licensed taxicabs may be subject to this requirement. (Reference Municipal Code of Chicago 9-112-060 and City of Chicago Rules and Regulations for Taxicab Medallion License Holders Rule 5.01 (PDF 387 KB)) Download Adobe Reader

Utilities/Private Incentives

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling stations and may assist with vendor selection on a case-by-case basis.

Point of Contact

Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone (817) 303-2903
Fax (817) 303-2929
walter.c.miller@atmosenergy.com

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Samantha Bingham Clean Cities Coordinator	Chicago Area Clean Cities Coalition	Phone:(312) 744-8096 Fax:(312) 744-5272
Brad Beauchamp Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-7322 Fax:
Norm Marek Illinois Department of Commerce and Economic Opportunity	Illinois State Energy Office	Phone:(217) 785-5082 Fax:(217) 785-2618
Darwin Burkhart Manager, Clean Air Programs	Illinois Environmental Protection Agency and Chicago Area Clean Cities Coalition	Phone:(217) 524-5008 Fax:(217) 557-2559
Walter C. Miller Energy Services Consultant	Atmos Energy	Phone:(817) 303-2903 Fax:(817) 303-2929
Scott Benson Transportation Specialist, Great Lakes Region	U.S. General Services Administration	Phone:(312) 886-8682 Fax:(312) 353-0989