Illinois General Assembly - Full Text of HB5461
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Full Text of HB5461  103rd General Assembly

HB5461 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5461

 

Introduced 2/9/2024, by Rep. Daniel Didech

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/241 new

    Creates the Concrete Carbon Utilization, Reduction, and Removal Breakthrough Act. Establishes a performance-based tax credit for concrete producers to incentivize the use of materials and methods for State-funded projects that reduce the embodied carbon generated in the production of concrete, and support the removal of carbon in the atmosphere and its permanent storage in concrete. Establishes a tax credit for concrete producers to defray the cost of implementing environmental product declaration technology at plants. Requires the implementation of performance-based specification standards for concrete. Directs the Department of Transportation to assess and propose opportunities to accelerate testing and evaluation of new decarbonization materials and methods for concrete by the Materials Bureau. Amends the Illinois Income Tax Act to make conforming changes.


LRB103 37548 JAG 67672 b

 

 

A BILL FOR

 

HB5461LRB103 37548 JAG 67672 b

1    AN ACT concerning safety.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Concrete Carbon Utilization, Reduction, and Removal
6Breakthrough Act.
 
7    Section 5. Findings. The General Assembly finds that:
8        (1) Embodied carbon emissions, which result from the
9    production of products, as distinct from operational
10    carbon, which results from the use of products, is a major
11    source of overall emissions contributing to climate
12    change.
13        (2) Portland cement, a fundamental component of
14    concrete, is a leading source of industrial carbon dioxide
15    emissions, the main greenhouse gas contributing to climate
16    change. Portland cement emissions are also among the most
17    difficult to rapidly and economically abate.
18        (3) Successful efforts to reduce overall carbon
19    dioxide emissions must include measures to reduce carbon
20    emissions resulting from the production and use of
21    Portland cement.
22        (4) Most Portland cement is used for the production of
23    concrete, serving as the principal binding agent that

 

 

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1    gives concrete many of its advantageous performance and
2    strength characteristics.
3        (5) Concrete is an essential, indispensable material
4    for construction, is foundational to the modern built
5    environment, and is the most used construction material in
6    the world. As a result of increased urbanization and
7    infrastructure replacement and renewal, the use of
8    concrete is projected to significantly increase in the
9    coming decades.
10        (6) The public sector in the United States, including
11    national, State, and local governments, is a major
12    procurer of concrete, amounting to over 30% of all
13    purchases and uses. Government agencies also regulate
14    standards and materials related to concrete specification
15    and use.
16        (7) Through its procurement and regulatory choices,
17    the State can play an important role in attaining emission
18    reductions in concrete and catalyzing a market for lower
19    carbon concrete.
20        (8) Because Portland cement-based concrete is a high
21    embodied carbon material, because concrete is an
22    indispensable material that cannot be replaced in a
23    timeframe meaningful for effective, science-based climate
24    action, and because concrete production is projected to
25    increase, rather than decline, in the future, innovation
26    in the materials and methods related to concrete is

 

 

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1    critical to reducing emissions associated with its
2    production and use.
3        (9) Concrete possesses the unique physical capacity to
4    durably store carbon dioxide that was formerly in the
5    atmosphere for time periods that are effectively
6    permanent. Consequently, combining embodied carbon
7    reduction in concrete with carbon removal and storage in
8    concrete has the potential to dramatically eliminate the
9    net emissions of the material and result in the eventual
10    attainment of carbon negativity, which means removing,
11    through a process or product, more carbon dioxide from the
12    atmosphere than that process or product emits or
13    generates.
14        (10) In recent years a variety of innovations that
15    both reduce concrete's embodied carbon and enable carbon
16    removal and storage to occur in different components of
17    concrete have been identified, tested, improved, and
18    commercialized.
19        (11) The State should:
20            (A) establish a program that incentivizes private
21        concrete producers who hold contracts with State
22        departments, agencies, and authorities to specify
23        materials and use methods in the production of
24        concrete for public projects that reduce the embodied
25        carbon of concrete, and enable the storage of carbon
26        dioxide formerly in the atmosphere in the projects;

 

 

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1        and
2            (B) adapt existing standards used by State
3        agencies related to the specification of concrete, and
4        the approval of materials permitted for specification,
5        to promote the acceptance and use of materials and
6        methods that reduce or remove and store carbon dioxide
7        in concrete, while ensuring at a minimum that quality,
8        performance, cost, and public safety are not adversely
9        affected or compromised in anyway, and, optimally, are
10        improved relative to current practice.
 
11    Section 10. Definitions. As used in this Act:
12    "Agency" means the Environmental Protection Agency.
13    "Carbon removal" means the direct removal of carbon
14dioxide from the atmosphere using different technologies and
15methods.
16    "Concrete-enabled carbon removal and storage" means the
17use of technologies or methods that remove carbon dioxide from
18the atmosphere, that recycle the carbon dioxide through its
19use in the concrete manufacturing process or parallel
20processes related to agricultural, industrial, or construction
21activities, and that results in the durable, irreversible
22storage of the removed carbon dioxide in mineral or stable
23organic forms.
24    "Concrete" means structural and nonstructural masonry, and
25precast and ready-mix concrete building products.

 

 

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1    "Department" means the Department of Commerce and Economic
2Opportunity.
3    "Durable carbon storage" means the storage of carbon
4dioxide that has been removed from the atmosphere via
5chemical, mineral, or biological processes in one or more
6materials, such as concrete or other media, over a time a
7period that has been assessed to be either permanent or no less
8than 1,000 years, based on assessment and verification
9criteria that have been approved by the Agency.
10    "Embodied carbon emissions" means carbon emissions
11generated as a result of a material's production, including
12mining, refining, manufacturing, and shipping.
13    "Environmental product declaration" means a
14product-specific Type III environmental product declaration
15that conforms to ISO Standard 14025, assesses the numeric
16global warming potential of the product, and allows for
17environmental impact comparisons between concrete mixes
18fulfilling the same functions.
19    "Global warming potential" means a numeric value,
20quantified in kilograms of carbon dioxide per ton of material,
21that measures the total contribution to global warming from
22the emission of greenhouse gasses or the elimination of
23greenhouse gas sinks, as a result of the production or use of
24concrete.
25    "Global warming potential baseline" means the numeric
26global warming potential value that determines whether a

 

 

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1producer is eligible to receive the tax credit defined in this
2Section.
3    "Low embodied carbon concrete" means concrete that has
4been certified to embody lower carbon emissions, as measured
5by a global warming potential metric, than the baseline
6embodied carbon emissions of conventional concrete made with
7Portland cement. Low embodied carbon emissions may be achieved
8through any combination of:
9        (1) emissions reductions realized during the concrete
10    production process resulting from: (A) the reduction of
11    clinker content in the cement component of concrete; (B)
12    the substitution of clinker content with lower
13    carbon-intensive alternative materials such as ground,
14    granulated blast furnace slag, fly ash, silica fume,
15    natural pozzolans, calcined clay, recycled ground-glass
16    pozzolan, or biochar; (C) improved energy efficiency in
17    plant operations; and (D) low carbon electricity or heat
18    utilization in plant operations;
19        (2) the utilization and permanent storage of carbon
20    dioxide in concrete materials, including cementitious
21    materials, aggregates, and admixtures, in the form of
22    mineralized carbonates or pyrolyzed biological matter; or
23        (3) the application of alkaline waste or recycled
24    concrete material in agricultural, industrial, and
25    construction applications to permanently mineralize carbon
26    through chemical processes.

 

 

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1    "Performance-based specification" means a contract
2provision that requires that a structural material achieve
3specified performance outcomes from the use of the structural
4material, including, but not limited to, outcomes related to
5the strength, durability, permeability, or other attributes
6related to the function of the building material for applied
7uses, as opposed to requiring that a structural material be
8produced using a specific prescribed manufacturing process,
9design features, technologies, or proportions of constituent
10materials.
11    "Portland cement" means hydraulic cement produced by
12pulverizing clinkers in combination with one or more of the
13forms of calcium sulfate.
 
14    Section 15. Producer tax credits.
15    (a) For taxable years beginning on or after January 1,
162025, a taxpayer that is a producer of concrete and meets the
17requirements of this Section shall be allowed a credit against
18the tax imposed by subsections (a) and (b) of Section 201 of
19the Illinois Income Tax Act as provided in subsection (c).
20    (b) In order to qualify for a tax credit, a concrete
21producer shall:
22        (1) deliver, pursuant to a contract with a State
23    agency, authority, or department with a private
24    contracting firm that has been contracted by the State,
25    concrete that is used in a construction or improvement

 

 

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1    project requiring the purchase of 50 cubic yards or more
2    of concrete and that is low embodied carbon concrete or
3    concrete that incorporates carbon removal, utilization,
4    and storage technology; and
5        (2) submit to the Department a global warming
6    potential value for the delivered concrete in the form of
7    a certified environmental product declaration; for
8    contracts that include multiple concrete mixes, the global
9    warming potential of all the mixes shall be proportionally
10    weighted into a single global warming potential score that
11    serves as the basis for the amount of the tax credit.
12    (c) The Department shall, by rule and in consultation with
13the Agency, develop a formula for determining the amount of
14the credit award under this Section, which, except as provided
15in subsection (d), shall not exceed 10% of the material costs
16of the concrete delivered.
17    (d) If the taxpayer receives credits under this both this
18Section and Section 25, the total amount of the both tax
19credits may not exceed 8% of the costs of the concrete
20delivered.
21    (e) In order to receive the tax credit allowed under this
22Section, a taxpayer shall apply to the Department for a
23certification that:
24        (1) certifies that each claimed concrete delivery
25    meets the requirements of this Section;
26        (2) provides that the certified environmental product

 

 

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1    declaration submitted under paragraph (2) of subsection
2    (b) has been approved by the Department; and
3        (3) sets forth the amount of the tax credit calculated
4    under this Section.
5    The application shall include a copy of the contract
6pursuant to which concrete was delivered and any other
7information determined relevant by the Department. Upon
8certification, the Department shall submit a copy of the
9contract to the taxpayer and the Department of Revenue.
10    (f) The Department may approve an application and issue a
11certification to a taxpayer that has previously been allowed a
12tax credit under this Section. When filing a tax return that
13includes a claim for a credit pursuant to this Section, the
14taxpayer shall include a copy of the certification issued by
15the Department.
16    (g) The Department may not approve an application or issue
17a certification to a taxpayer for tax credits under this
18Section in excess of $1,000,000.
19    (h) The order of priority of the application of the credit
20allowed under this Section shall be as prescribed by the
21Department. The amount of the credit under this Section shall
22not reduce a taxpayer's tax liability under the Illinois
23Income Tax Act to less than zero. Any credit shall be valid in
24the taxable year in which the certification is approved, and
25any unused portion of the credit may be carried forward to the
26next 7 taxable years or until the credit amount is depleted,

 

 

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1whichever is earlier.
2    (i) The amount of tax credits that may be issued pursuant
3to this Section may not in the aggregate exceed $10,000,000 in
4any year. The Department shall issue certifications for the
5tax credit pursuant to this Section on a first-come,
6first-serve basis.
 
7    Section 20. Department guidelines.
8    (a) Whenever a State agency or department purchases 50
9cubic yards or more of concrete or undertakes any construction
10or improvement project that requires the use 50 cubic yards or
11more of concrete, the agency or department shall follow the
12rules established by the Department under Section 40.
13    (b) In preparing the specifications for any contract for
14the purchase of 50 cubic yards or more of concrete, or for any
15construction or improvement project that requires the use 50
16cubic yards or more of concrete, the Director of Central
17Management Services or any other State agency having the
18authority to contract for the purchase of goods or services
19shall include in the invitation to bid, where relevant, a
20statement that any response to the invitation that proposes or
21calls for the use low embodied carbon concrete or concrete
22that utilizes carbon removal, utilization, and storage
23technology shall be eligible for tax credits pursuant to this
24Act. If the Department of Central Management Services or other
25contracting State agency makes a determination to purchase or

 

 

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1use low embodied carbon concrete or concrete that uses carbon
2removal, utilization, and storage technology in the
3construction project, the Department of Central Management
4Services shall include in the invitation to bid a
5predetermined bid allowance price for the concrete, which
6shall be used by all bidders in the public bidding process.
7    (c) Nothing in this Section shall be construed to impose
8any liability upon, or to give rise to a cause of action
9against, a concrete producer.
10    (d) Nothing in this Section shall be construed to exempt
11any entity from complying with any applicable law, rule,
12standard, or specification, including, but not limited to,
13those regarding the use of concrete in construction projects.
 
14    Section 25. Establish producer tax credit to defray the
15cost of implementing environmental product declaration
16technologies.
17    (a) For taxable years beginning on or after January 1,
182025, a taxpayer that is a producer of concrete or a producer
19of a major component of concrete, including cement or
20aggregate, shall be allowed a credit against the tax imposed
21pursuant to subsections (a) and (b) of Section 201 to
22compensate the taxpayer for costs incurred as a result of
23implementing environmental product declaration technologies to
24determine the product-based embodied carbon emissions of
25concrete produced at a production facility that the taxpayer

 

 

HB5461- 12 -LRB103 37548 JAG 67672 b

1owns or operates.
2    (b) The amount of the credit authorized pursuant to this
3Section shall not exceed the lesser of: (i) the full cost
4incurred for an environmental product declaration analysis of
5a single concrete, cement, aggregate, or related production
6facility or (ii) $3,000. A taxpayer may claim the credit
7authorized under this Section for the cost of completing
8environmental product declaration analyses at up to 8
9production facilities owned or operated by the same taxpayer
10in a single taxable year.
11    (c) The order of priority of the application of the tax
12credit allowed pursuant to this Section, and any other credits
13allowed against the tax imposed pursuant to the Department of
14Commerce and Economic Opportunity Law of the Civil
15Administrative Code of Illinois, for a privilege period, shall
16be as prescribed by the Director. The amount of the credit
17applied under this Section against the tax imposed pursuant to
18the Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois, shall not reduce a
20taxpayer's tax liability to an amount less than the statutory
21minimum. The amount of the tax credit otherwise allowable
22under this Section which cannot be applied for the privilege
23period due to the limitations of this subsection or under
24other provisions of the Civil Administrative Code of Illinois,
25may be carried forward, if necessary, to the 7 privilege
26periods following the privilege period for which the tax

 

 

HB5461- 13 -LRB103 37548 JAG 67672 b

1credit was allowed.
 
2    Section 30. Performance-based standards for the
3specification of concrete. The Department of Central
4Management Services and the Department of Transportation shall
5be directed to develop and implement performance-based
6specifications for concrete for use in buildings as well as
7horizontal roadways and infrastructure, including modular
8units, such as concrete masonry units and concrete brick, by
9no later than January 1, 2025. The performance-based
10specifications shall include global warming potential
11thresholds equal to the maximum global warming potential
12thresholds established for approved low carbon concrete green
13procurement specifications.
 
14    Section 35. Expedited review process of low carbon
15concrete materials and methods. The Department of
16Transportation shall be directed to prepare a plan by no later
17than the effective date of this Act, to enable the Materials
18Bureau to implement an expedited evaluation protocol for low
19embodied carbon concrete products, materials and methods
20submitted for evaluation by private manufacturers and
21suppliers for inclusion in the Department's approved materials
22list. The plan will include an assessment of all necessary
23technical and staff resources required to effectively evaluate
24and test new materials and methods in a comprehensive and

 

 

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1timely manner. The plan will be reviewed by the Governor and
2the General Assembly to determine what fiscal resources would
3be required to implement the plan, and what budgetary actions
4should be taken to fund it.
 
5    Section 40. Administrative authority and rulemaking.
6    (a) The Agency shall adopt rules to implement the
7provisions of this Act, except that the Department shall adopt
8rules concerning the tax credits provided in Sections 15 and
925. The Agency's rules shall include, but not be limited to:
10        (1) global warming potential baselines for concrete
11    mixes supplied pursuant to contracts with State agencies;
12        (2) thresholds for low embodied carbon concrete and
13    concrete that incorporates carbon removal, utilization,
14    and storage technology to qualify for a tax credit under
15    Section 15;
16        (3) a uniform process for concrete producers to
17    certify that concrete is low embodied carbon concrete, or
18    that it utilizes carbon removal, utilization, and storage
19    technology, and for determining the global warming
20    potential value of concrete;
21        (4) guidelines for training State contracting
22    personnel to implement the requirements of this Act; and
23        (5) a mechanism for monitoring contractor compliance
24    with the requirements of this Act.
25    (b) The Department shall adopt rules concerning the tax

 

 

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1credits provided in Sections 15 and 25.
2    (c) No later than 2 years after the effective date of this
3Act, the Director, in consultation with the State Treasurer,
4shall prepare and submit a report to the Governor and the
5General Assembly, containing a cost-benefit analysis of the
6tax credits established in Section 15 in order to quantify the
7budgetary impact of the program relative to its carbon
8reduction impact. The report shall recommend whether the
9program should be continued, modified, or repealed, and
10include any recommendations for legislative or regulatory
11action to improve the program.
 
12    Section 900. The Illinois Income Tax Act is amended by
13adding Section 241 as follows:
 
14    (35 ILCS 5/241 new)
15    Sec. 241. Concrete Carbon Utilization, Reduction, and
16Removal Breakthrough Act. For taxable years beginning on or
17after January 1, 2025, each taxpayer that is awarded a credit
18under the Concrete Carbon Utilization, Reduction, and Removal
19Breakthrough Act is entitled to a credit against the taxes
20imposed by subsections (a) and (b) of Section 201 as provided
21in that Act.