Governor J.B. Pritzker was able to sign a tax incentive package into law in the hopes of assisting Illinois in becoming a manufacturing center for the nascent electric vehicle industry. During the recently finished fall session, the General Assembly enacted the Reimagining Electric Vehicles in Illinois, (REV Act), with close-unanimous bipartisan support. It offers EV manufacturers tax incentives for the income tax withheld as well as training expenditures for new or retained staff.

It also pertains to EV component makers, such as battery manufacturers. It’s an attempt to entice new firms to Illinois while also encouraging existing companies to make an investment in their Illinois plants and employees. Depending on conditions such as company location as well as the number of employees recruited, the new law’s tax credits range from 75 percent to 100 percent of income tax withheld for the purpose of creating new employment or 25 percent to 50 percent for retaining employees. A 10 percent credit for the training expenses would be offered as well.

The plan also includes tax rebates for construction wages as well as building materials. The additional incentives complement Illinois’ other manufacturing advantages, according to Pritzker, but they are required to make Illinois financially competitive with other states.

Senator Steve Stadelman (D), who sponsored the bill, said that’s especially true in Belvidere, where the Stellantis manufacturing firm, which makes Jeeps there, is apparently exploring retooling its factory to make electric vehicles. The state has also been trying to entice Stellantis and Samsung to form a joint battery manufacturing company.

Other benefits of selecting Illinois, as per Pritzker, include a central location in the United States, solid infrastructure, the nation’s second-biggest crop of computer science engineers, and two important national laboratories. The tax incentive package received widespread Republican approval. During floor debate, however, they grilled the bill’s Democratic sponsors over why the governor included a similar tax incentive package dubbed as the Blue-Collar Jobs Act in his current-year budget proposal, lumping it in with other programs he referred to as “corporate tax loopholes.” The manufacturing industry in the state also supports the bill.

The state set a required goal of 25 percent renewable energy by 2025 in 2007. However, the 2007 law artificially lowered the bar by limiting the target to power bought directly from the state’s two main electric utilities: ComEd in Chicago and Ameren Illinois in the rest of the state.

Within several years, however, thousands of consumers — and in some cases, entire communities — were abandoning those two utilities in favor of other electrical providers. As a result, the target only applied to a tiny fraction of customers who made up around 20% of the state’s overall energy usage. In the meantime, the Illinois Power Agency has faced numerous policy and market stumbling blocks that have essentially prevented it from using money collected from substitute supply clients to stimulate renewable energy development, putting the finances vulnerable to legislators searching to plug gaps elsewhere in the state’s chronically shaky budget.

The bill Rauner enacted in late 2016 was meant to address these concerns, but they persist and new ones emerge, including a considerable halt in renewable energy production last year due to the coronavirus outbreak.

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