State of Illinois
92nd General Assembly

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 1        AN ACT concerning taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Illinois Income Tax  Act  is  amended  by
 5    adding Section 213 as follows:

 6        (35 ILCS 5/213 new)
 7        Sec.  213.   New  generation  cooperative  incentive  tax
 8    credit.
 9        (a)  As used in this Section:
10        "Department" means the Department of Revenue.
11        "Development  facility"  means a facility producing goods
12    derived from an agricultural commodity or using a process  to
13    produce goods derived from an agricultural product.
14        "Eligible  new  generation cooperative" means a nonprofit
15    corporation  formed  under  the  General   Not   For   Profit
16    Corporation  Act  of  1986  for  the  purpose  of operating a
17    development facility or a renewable fuel production  facility
18    and approved by the Department.
19        "Member" means a person, partnership, corporation, trust,
20    or  limited  liability  company that invests cash funds in an
21    eligible new generation cooperative.
22        "Renewable fuel production  facility"  means  a  facility
23    producing  an energy source that is derived from a renewable,
24    domestically grown,  organic  compound  capable  of  powering
25    machinery,  including  an  engine  or  power  plant,  and any
26    by-product derived from that energy source.
27        (b)  Beginning with taxable  years  ending  on  or  after
28    December  31, 2001 and ending with taxable years ending on or
29    before December 30, 2006, any member who invests  cash  funds
30    in  an  eligible  new generation cooperative is entitled to a
31    credit against the tax imposed by subsections (a), (b),  (c),

                            -2-                LRB9204106SMdv
 1    and  (d)  of  Section 201 in an amount equal to the lesser of
 2    50% of the  member's  investment  or  $20,000.   The  maximum
 3    credit  that  may  be  allowed  to the members of any one new
 4    generation cooperative is $5,000,000.
 5        (c)  A  member  shall  submit  to   the   Department   an
 6    application  for the tax credit authorized by this Section on
 7    a form provided by the Department.  To  be  approved  by  the
 8    Department  as  an  eligible  new generation cooperative, the
 9    cooperative must present (i) its certificate of incorporation
10    and a certificate of good standing (if it  is  more  than  60
11    days  old), (ii) a prospectus showing the estimated number of
12    members, amount of member equity desired, and expected  dates
13    of   equity  contributions,  (iii)  a  feasibility  study  or
14    business plan, if one is not included in the prospectus,  and
15    (iv)  a  copy  of  the deed for the cooperative's land, or an
16    option on land, and a copy of the construction contract.
17        If the member  meets  all  criteria  prescribed  by  this
18    Section  and  is  approved  by the Department, the Department
19    shall issue a  tax  credit  certificate  in  the  appropriate
20    amount.   Tax  credits  issued pursuant to this Section shall
21    initially be claimed for the taxable year in which the member
22    contributes   capital   to   an   eligible   new   generation
23    cooperative.  Any amount of credit that exceeds the  tax  due
24    for  a  member's taxable year may not be carried back but may
25    be carried forward  to  any  of  the  member's  3  subsequent
26    taxable  years.   The credit shall be applied to the earliest
27    year for which there  is  a  tax  liability.   If  there  are
28    credits  from  more  than  one tax year that are available to
29    offset a liability,  the  earlier  credit  shall  be  applied
30    first.   Tax  credits  issued pursuant to this Section may be
31    assigned, transferred, or sold.  Whenever  a  certificate  of
32    tax  credit  is  assigned,  transferred,  sold,  or otherwise
33    conveyed, a notarized endorsement shall  be  filed  with  the
34    Department  specifying  the name and address of the new owner
                            -3-                LRB9204106SMdv
 1    of the tax credit or the value of the credit.
 2        (d)  At least 10% of the  tax  credits  authorized  under
 3    this  Section shall be offered in any fiscal year to projects
 4    with capital costs of no more than $1,000,000.  If the amount
 5    of tax credits allowed under this Section exceeds the  amount
 6    needed  for  such smaller projects, the remaining tax credits
 7    may be offered for projects with capital costs in  excess  of
 8    $1,000,000.
 9        (e)  If  members  of  a project would be eligible for tax
10    credits in  excess  of  $5,000,000,  tax  credits  authorized
11    pursuant  to  this  Section  shall  be  prorated  between the
12    members on a percent of investment basis, not to  exceed  the
13    maximum allowed per member.
14        (f)  An eligible new generation cooperative must maintain
15    cooperative  status  and  operational control of the approved
16    facility  for  5  years.   If  an  eligible  new   generation
17    cooperative   does   not   maintain  cooperative  status  and
18    operational control of the facility for 5 years, any  credits
19    allowed  to  members  of  the  cooperative  are forfeited.  A
20    cooperative that repays its members' investments  may  change
21    its  status  or  relinquish  control of the facility with the
22    approval  of  the  Department,  but  in  no  event  may   the
23    cooperative  change  its status or relinquish control in less
24    than 3  years  after  it  is  approved  as  eligible  by  the
25    Department.
26        (g)  The  Department of Natural Resources, the Department
27    of Commerce and Community  Affairs,  and  the  Department  of
28    Agriculture   may  provide  to  an  eligible  new  generation
29    cooperative any technical support necessary to assist in  the
30    operation of the facility or the marketing of its products.
31        (h)  The Department shall annually report to the Governor
32    and the General Assembly regarding the tax credits authorized
33    under  this  Section  that were issued in the previous fiscal
34    year.  The report shall contain, but not be limited  to,  the
                            -4-                LRB9204106SMdv
 1    aggregate  number  and dollar amount of tax credits issued by
 2    the Department, the number and dollar amount of  tax  credits
 3    claimed by taxpayers, and the number and dollar amount of tax
 4    credits unclaimed by taxpayers as well as the number of years
 5    allowed  for  claims  to  be  made.   This  report  shall  be
 6    delivered no later than November of each year.

 7        Section  99.  Effective date.  This Act takes effect upon
 8    becoming law.

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