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SB 1340

MANUFACTURING-ENERGY-EXEMPTION

104th Regular Session Introduced by John Curran and 1 co-sponsor

The bill exempts energy use (gas and electricity) in the manufacturing or assembling of tangible property from certain state energy taxes for certified manufacturers, with certific

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Bill Summary · SB 1340

Summary — SB 1340 (MANUFACTURING‑ENERGY‑EXEMPTION)

Status: Introduced Feb 18, 2025; Referred to Assignments
Title shown: MANUFACTURING‑ENERGY‑EXEMPTION
Note: The provided file mixes materials from multiple jurisdictions (Illinois, Arizona, Hawaii). This summary focuses on the manufacturing/energy tax exemption text (Illinois‑style provisions) that corresponds to the bill title.

Purpose / Intent

The bill amends several energy tax statutes to exempt the use of natural gas and electricity in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease. The stated intent is to exclude such energy use from certain state energy taxes and to clarify that energy‑related receipts from eligible manufacturing businesses are excluded from the tax base.

Key provisions

  • Amends the Gas Use Tax Law, the Gas Revenue Tax Act, and the Electricity Excise Tax Law to provide an exemption for energy consumed “in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease.”
  • Changes the definition of “gross receipts” in the Gas Revenue Tax Act so that it “does not include consideration received from” business enterprises that:
    • Are certified under Section 9‑222.1 of the Illinois Public Utilities Act (via the Department of Commerce and Economic Opportunity), and/or
    • Are properly assigned or included within specified Standard Industrial Classification (SIC) codes (listed as: 10; 12; 13; 14; 21–39 in the 1987 SIC Manual).
  • Retains or references the existing option for an alternate tax rate (historically 2.4 cents per therm) in the Gas Use Tax Law, while adding the exemption language.
  • Exemptions apply “to the extent of such exemption and during the period of time specified by the Department of Commerce and Economic Opportunity,” indicating a certification/administration process and potentially time‑limited application.
  • Effective date language in the draft indicates immediate effectiveness upon enactment.

Who would be affected

  • Beneficiaries: Manufacturers and assemblers whose operations fall within the listed SIC codes and who are certified under the referenced statutory process — they would no longer be taxed on qualifying gas/electric use for manufacturing/assembly.
  • Utilities / energy suppliers: Reduced taxable receipts for sales to certified manufacturing customers; changes to billing and tax remittance responsibilities.
  • State and local governments: Potential reduction in tax revenue collected under the affected statutes (magnitude depends on scope and duration of exemptions).
  • Department of Commerce and Economic Opportunity (or equivalent): Charged with certifying eligible business enterprises and specifying the applicable period for the exemption.

Implementation / administrative details

  • Certification Process: The exemption’s application is tied to certification under Section 9‑222.1 of the Public Utilities Act and the Department’s determination of period/extent of exemption — administrative rules and procedures would likely be required.
  • Tax administration: Utilities would need to identify eligible customers and exclude qualifying sales from gross receipts for tax calculation purposes; taxpayers may need to document certification and qualifying use.
  • Effective immediately (per draft language), but details depend on final enacted text and implementing guidance.

Potential fiscal and policy impacts

  • Revenue impact: Likely reduction in energy tax receipts to the extent manufacturers’ qualifying consumption is exempted; fiscal effect depends on number of certified firms and the period of exemption.
  • Economic impact: Lowers operating energy costs for eligible manufacturing/assembly activity — may incentivize retention/expansion of manufacturing and increase competitiveness.
  • Equity/administrability: Requires robust certification and monitoring to prevent misclassification; may shift tax burden if exemptions are broad.

Related legislation / procedural notes

  • Companions listed: HB 4391 and HB 1021 (companion bills).
  • The document includes unrelated SB 1340 materials from other states (Arizona — audit schedule changes; Hawaii — climate target amendments). Those texts are distinct and not part of the manufacturing/energy tax exemption described above.

If you want, I can:
- Produce a one‑page fiscal note estimating revenue loss using available consumption and manufacturing employment data, or
- Draft suggested statutory language to clarify certification duration and anti‑abuse safeguards.

Compiled from official sources — confirm details with the bill’s official record.

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