HB2051 Summary: Hydrogen Fuel Replacement Tax Credit Act

• Creates an income tax credit of $1 per kilogram of zero-carbon hydrogen consumed in Illinois by eligible taxpayers for tax years ending December 31, 2023 through December 31, 2042.

• Increases credit by $0.15 per kilogram if hydrogen use occurs in an equity investment eligible community, and by an additional $0.15 per kilogram if contractors or labor are employed in such communities for equipment conversion or installation.

• Requires producers to attest under penalty of perjury that environmental attribute credits from zero-emission or renewable energy facilities in the same regional grid were retired to match hydrogen production energy consumption, and that hydrogen was not produced during grid performance assessment intervals.

• Caps total annual tax credit allocation at $100,000,000 plus any unallocated credits from the prior fiscal year, with priority given to participants in U.S. Department of Energy Hydrogen Hubs, then returning participants based on prior usage levels.

• Allows taxpayers to carry forward unused credits for up to 5 years and to transfer earned but unused credits to other taxpayers; imposes penalties on taxpayers who fail to use at least 90% of their allocated credits without exceptional circumstances.