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HB 3419

Relating to water.

2025 Regular Session Introduced by Ken Helm and 1 co-sponsor

Creates an Illinois rail carrier renewable diesel tax credit: $1 per gallon of renewable diesel manufactured in-state for rail use, for tax years from 2027; 10-year carryforward.

In committee upon adjournment.
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Bill Summary · HB 3419

HB 3419 — Summary (Relating to water / renewable diesel credit for rail carriers)

Status: In committee upon adjournment (as of 2025-06-28)
Introduced: February 2025 by Rep. Elizabeth "Lisa" Hernandez (cosponsors: Reps. Jaime M. Andrade, Jr. and Edgar González, Jr.)

Purpose / intent

Create a state income tax incentive to encourage in‑state production of renewable diesel intended for use by rail carriers. The stated intent is to support manufacture of lower‑carbon diesel fuel in Illinois for the rail sector.

Key provisions

  • Adds Section 246 to the Illinois Income Tax Act to establish a “Rail carrier renewable diesel tax credit.”
  • Eligibility: Taxpayers that manufacture renewable diesel in Illinois for use by a rail carrier.
  • Credit amount: $1.00 per gallon (or fraction of a gallon) of renewable diesel manufactured in the State for use by a rail carrier.
  • Effective for taxable years beginning on or after January 1, 2027.
  • Documentation: Taxpayers must retain records of gallons manufactured for rail use and verification that blended fuel meets the bill’s renewable diesel definition; documentation must meet Department of Revenue form, manner, and timing requirements and be sufficient for the Department to determine gallons produced for rail carriers.
  • Carryforward: Excess credit (amount that exceeds tax liability) may be carried forward up to 10 taxable years. Credits are applied to the earliest available year first and may not reduce tax liability below zero.
  • Administrative/other: The new Section is explicitly exempt from the provisions of Section 250 of the Tax Act (as written).
  • Definitions:
    • “Renewable diesel” — hydrocarbon diesel derived from biomass that meets the latest ASTM standards D975 or D396.
    • “Rail carrier” — Class I, II, or III railroads as defined in 49 U.S.C. §20102(1).

Who is affected

  • Primary: Illinois taxpayers that manufacture renewable diesel intended for rail carrier use (eligible for the credit).
  • Secondary: Rail carriers (Class I/II/III) as users of the fuel; Illinois Department of Revenue (administration, verification); State budget/treasury (potential reduction in income tax receipts).

Procedural / timeline notes

  • Introduced in Feb. 2025; public hearing held; referred through Revenue & Finance Committee and subcommittee; re‑referred to Rules and Homeland Security, Public Safety & Veterans’ Affairs per legislative actions. Current status: In committee upon adjournment.
  • If enacted, the Act takes effect upon becoming law; credit applies to tax years beginning Jan 1, 2027.

Potential impacts (general)

  • Incentivizes domestic production of renewable diesel for rail, potentially supporting decarbonization efforts and local industry investment.
  • Could reduce State income tax revenue proportionate to credits claimed (no fiscal estimate in the bill text).

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

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