Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 77

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 8
Chunk 77
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 the Inflation and Reduction Act.  While there is no certainty at this time as to what will be included in any final legislation that actually becomes law, we are closely monitoring any changes to sections 45Q and 45Z of the Internal Revenue Code that could impact the economics of our carbon capture and sequestration project.

In January 2025, the USDA released an interim
rule on 45Z tax credits titled “Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks”,
or “CSA rule”. The rule helps to connect CSA practices used in the production of feedstock crops with reductions in
the carbon footprint of the biofuels industries, laying out how practices that reduce greenhouse gas emissions or sequester carbon
will be scored, on a county-by-county basis. These practices include no-till planting, cover crops and nitrogen inhibitors, which
may be measured individually, rather than requiring bundling of practices. The interim rule is subject to a 60-day comment period
with final resolution to be determined by the Trump administration.

Illinois Senate Bill 3968 was introduced
during the 2024 legislative session and assigned to the Senate Executive Committee. The bill proposed banning carbon sequestration
projects located over, under, or through a sole-source aquifer, including the three adjacent watersheds that make up the Mahomet
Sole Source Aquifer Project Review Area, a designation established by the EPA in March 2015. However, SB 3968 did not advance
and was not enacted during that session. In the 2025 legislative session, Senate Bill 1723 was introduced with an amendment that
defined the term “sole-source aquifer” to specifically refer to the Mahomet Sole Source Aquifer Area, as defined by
the EPA. Under this definition, SB 1723 would prohibit carbon sequestration activities over, under, or through the aquifer as
defined in the bill. The Illinois Senate passed SB 1723 on April 10, 2025 and on May 20, 2025, the Illinois House of Representatives
approved the bill. The legislation now awaits the Governor’s consideration and potential signature into law. The first proposed
injection well for our carbon sequestration project is located in the northern portion of the Sangamon River near Fisher Upstream
Area watershed, and it lies outside the mapped boundary of the Mahomet Sole Source Aquifer as defined in SB 1723, approximately
five miles north of