Illinois Incentives and Laws

Last Updated October 2006

State Incentives

Biofuels Research and Development

The Renewable Fuels Research, Development, and Demonstration Program is administered by the Illinois Department of Commerce and Economic Opportunity. The goal of this program is 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 biofuels facilities in Illinois.

Point of Contact

Dave Loos
Illinois Department of Commerce and Economic Opportunity
Illinois State Energy Office
Phone (217) 785-3969
Fax (217) 785-2618
dave.loos@illinois.gov
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/
 

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, "American" produced-fuels. The Illinois Environmental Protection Agency, in cooperation with Chicago Area Clean Cities, is also launching the Illinois Green Fuels and Illinois Green Dealers programs. The Illinois Green Fuels Program recognizes and highlights retail or commercial fuel stations that sell E85, natural gas, propane, or other clean fuels to the public or surrounding fleets. The Illinois Green Dealers Program recognizes Illinois car dealerships that promote the sale of AFVs and educate their customers on the benefits of AFVs, including which vehicle models can use E85 and where the nearest E85 stations are located.

Point of Contact

Darwin Burkhart
Manager, Mobile Source Programs
Illinois Environmental Protection Agency
Phone (217) 557-1441
Fax (217) 524-4710
darwin.burkhart@epa.state.il.us
http://www.epa.state.il.us/air/
 

Clean School Bus Program

The Illinois Clean School Bus Program, established by the Illinois Environmental Protection Agency in November 2003, provides funding to assist schools/school districts to reduce emissions from diesel-powered school buses through emission control retrofits, 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, Mobile Source Programs
Illinois Environmental Protection Agency
Phone (217) 557-1441
Fax (217) 524-4710
darwin.burkhart@epa.state.il.us
http://www.epa.state.il.us/air/
 

E85 Refueling Infrastructure Grant

Through the Opportunity Returns initiative and a grant from the Illinois Clean Energy Community Foundation, $500,000 in funding is available for the Illinois E85 Clean Energy Infrastructure Development Program to establish new E85 facilities 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 E85 operation (maximum grant of $3,000 per facility), or up to 30% of the cost to construct a new E85 refueling facility or major modification to an existing facility (maximum grant of up to $30,000 per facility).

Point of Contact

Dave Loos
Illinois Department of Commerce and Economic Opportunity
Illinois State Energy Office
Phone (217) 785-3969
Fax (217) 785-2618
dave.loos@illinois.gov
http://www.commerce.state.il.us/dceo/Bureaus/Energy_Recycling/
 

Alternative Fuel Vehicle (AFV) and Alternative Fuel Rebates

The Illinois Alternate Fuels Rebate Program (Rebate Program) provides a rebate for 80% of the incremental cost of purchasing an AFV (up to $4,000), 80% of the cost federally certified alternative fuel vehicle conversions (up to $4,000), and for the incremental cost of purchasing alternative fuels. Eligible fuels for the program include E85, biodiesel blends of at least 20%, natural gas, propane, electricity, and hydrogen. To be eligible, a vehicle must be an on-road vehicle, licensed, and legal to be driven on public roads. For all rebates, the AFV, conversion system, or alternate fuel must be purchased from an Illinois-based company or vendor. Hybrid electric vehicles are not eligible. The E85 fuel rebate is up to $450, or $340 per year (depending on vehicle miles traveled), for three years for each flexible fuel vehicle that uses E85 at least half the time. The biodiesel fuel rebate (B20 and higher blends) is for 80% of the incremental cost of the biodiesel fuel, as compared to conventional diesel. The Rebate 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, Mobile Source Programs
Illinois Environmental Protection Agency
Phone (217) 557-1441
Fax (217) 524-4710
darwin.burkhart@epa.state.il.us
http://www.epa.state.il.us/air/
 

State Laws and Regulations

Alternative Fuel Vehicle Labeling Requirement

Propane and compressed natural gas (CNG) vehicles must display visible identifying decals, as established by the National Fire Protection Association. (Reference 625 Illinois Compiled Statutes 5/12-704.3)

Fleet User Fee Exemption

A $20 per vehicle annual user fee 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 Alternative Fuels Fund. (Reference 415 Illinois Compiled Statutes 120/35)

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 five 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; and
• Submit a final report to the Governor and General Assembly outlining the progress and accomplishments made during the year along with a financial report for the year.

(Reference 20 Illinois Compiled Statutes 1105/3, and 110 Illinois Compiled Statutes 520/6.5 to 520/6.6)

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, make, model, and vehicle identification number of each FFV and listing the number of vehicles by zip code. The database must be made available to the public in both print and electronic format. (Reference 415 Illinois Compiled Statutes 120/22)

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 made. The taxes apply to 100% of the proceeds from sales made thereafter. (Reference 35 Illinois Compiled Statutes 120/2-10)

Alternative Fuel Use Study

The Director of the Department of Central Management Services was instructed to prepare a thorough and comprehensive motor vehicle fleet management study, including, among other items, a proposal or recommendation for the implementation of means to research and promote the cost effective use of alternative fuels in state owned motor vehicles, particularly those fuels utilizing Illinois agricultural products. (Reference Executive Order Number 2, 2003)

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 and 105/3-10)

Biodiesel Blend Use Requirement

Beginning July 1, 2006, 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 or 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 fuel. Biodiesel is defined as a renewable fuel conforming to the American Society of Testing and Materials (ASTM) standard D6751 and registered with the U.S. Environmental Protection Agency. (Reference 625 Illinois Compiled Statutes (ILCS) 5/12-705.1 and 415 ILCS 120/10)

Neighborhood Electric Vehicle (NEV) Access to Roadways

Effective January 1, 2006, NEVs may be operated only on streets where the posted speed limit is 35 miles per hour (mph) or less, and may cross a road or street at an intersection where the road or street has a posted speed limit of more than 35 mph (except for any state highway, tollroad or interstate highway). NEVs are defined as self-propelled, electronically powered, four-wheeled motor vehicles 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 Code of Federal Regulations Part 571.500. (Reference 625 Illinois Compiled Statutes 5/11-1426.1)

State Agency Vehicle Acquisition Priorities and Biofuels Use

State Agency Vehicle Acquisition Priorities and Biofuels UseThe Illinois Department of Central Management Services (CMS) is directed to take all actions necessary to enable the procurement of 2% biodiesel 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 refueling 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)

State Vehicle Procurement – Biofuels Preference

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 Energy Plan

Governor Blagojevich 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 gas stations that sell biofuels, to ensure that all gas stations in the state offer E85 by 2017, and to help the auto industry increase and improve the flexible fuel vehicles they produce.

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)

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 House Bill 4782, 2006 and 625 Illinois Compiled Statutes 5/11-1429)

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 imposed according to federal corporate average fuel economy (CAFE) 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)

Utilities/Private Incentives

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas refueling stations and 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
 

Illinois Points of Contact: