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91_SB0786enr
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1 AN ACT promoting micro-enterprise and self-employment in
2 Illinois.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short title. This Act may be cited as the
6 Micro-Enterprise and Self-Employment Assistance Act.
7 Section 5. Definitions. In this Act:
8 "Department" means the Illinois Department of Commerce
9 and Community Affairs.
10 "Micro-enterprise" means a new or existing very small
11 business entity or self-employed individual with 5 or fewer
12 employees whose capital needs are too small generally to
13 obtain business credit from regulated commercial financial
14 institutions.
15 "Microcredit" means the practice of lending money or
16 extending other forms of business credit to
17 micro-enterprises.
18 "Small non-bank lender" or "SNBL" means an entity that is
19 not regulated by the Office of Banks and Real Estate, the
20 Department of Financial Institutions, or any agency of the
21 United States government, and that is primarily engaged in
22 providing microcredit to micro-enterprises.
23 Section 10. Legislative findings.
24 (a) Micro-enterprise is important to the economy of
25 Illinois. Very small businesses provide livelihoods to
26 thousands of people in this State and produce and provide
27 essential goods and services. Most micro-enterprises are
28 businesses operated by a single self-employed person with
29 few, if any, additional employees. Self-employed persons
30 comprise more than 8% of the total workforce in Illinois.
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1 (b) Micro-enterprise is an important component of this
2 State's welfare-to-work policy. Micro-enterprise provides
3 individuals with opportunities for economic self-sufficiency
4 and self-respect. Owning and operating one's own small
5 business should be a viable alternative to welfare and to
6 traditional wage-labor employment. It is in the best interest
7 of this State and its economy that individuals be encouraged
8 to form and operate their own small businesses.
9 (c) Lack of access to capital is a serious barrier to
10 starting and successfully operating a very small business.
11 Traditional financial institutions cannot profitably provide
12 business credit to micro-enterprises. The high relative cost
13 of making and servicing loans to very small businesses
14 discourages commercial banks from making those loans. Minimum
15 loan size requirements deprive micro-enterprises of access to
16 traditional sources of business loans and have created a
17 credit gap for very small businesses. Trends in the
18 financial services industry may exacerbate this problem by
19 causing commercial banks to concentrate on larger, more
20 profitable loans.
21 (d) Many prospective micro-entrepreneurs lack the basic
22 business knowledge and experience necessary to own and
23 operate a successful small business venture. Providing
24 adequate business education, training and counseling services
25 to micro-enterprises can substantially increase their chances
26 of success. It is in the best interests of Illinois that
27 Illinois micro-entrepreneurs have access to adequate business
28 training programs, counseling services, and other forms of
29 technical assistance.
30 (e) Small non-bank lenders provide the principal source
31 of microcredit for many micro-enterprises. Various public
32 and private entities have formed SNBL's to fill the credit
33 gap that exists for very small businesses in Illinois.
34 Micro-loans provided by SNBL's are often the only
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1 institutional source of capital available to
2 micro-enterprises. Coordinating technical assistance
3 programs for micro-enterprises with credit provided by SNBL's
4 can significantly increase the success rates of microcredit
5 loans. Assisting technical assistance providers and
6 encouraging good microcredit practices by SNBL's are in the
7 public interest.
8 (f) It is in the best interests of this State and the
9 micro-enterprises operating in this State that programs
10 assisting self-employed persons and small businesses be
11 well-publicized, coordinated, and accessible to all eligible
12 micro-enterprises. This State and its units of local
13 government sponsor many programs intended primarily to
14 benefit small business. These programs include training
15 programs, business counseling services, loan programs,
16 specialized grants, tax incentives, procurement
17 opportunities, and other small business assistance services.
18 Many of these programs also benefit SNBL's by enhancing the
19 credit and business opportunities of micro-enterprises.
20 Modem communications technology, including the Internet, can
21 increase the effectiveness and availability of these
22 programs.
23 Section 15. Micro-Enterprise Council. There is created
24 within the Department the Micro-Enterprise Assistance
25 Council. The Council shall consist of 11 members. One of
26 the members shall be the Director of the Department or his or
27 her designee, one shall be the Director of Financial
28 Institutions or his or her designee, one shall be the
29 Secretary of Human Services or his or her designee, and one
30 shall be the chair of the Illinois State Micro-Enterprise
31 Initiative or his or her designee. Three members shall be
32 appointed by the Governor. Of the remaining 4 members, one
33 shall be appointed by the President of the Senate, one by the
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1 Minority Leader of the Senate, one by the Speaker of the
2 House of Representatives, and one by the Minority Leader of
3 the House of Representatives. Appointed members shall be
4 uniquely qualified by education, professional knowledge, or
5 experience to serve on the Council. Appointed members shall
6 include operators of micro-enterprises, representatives of
7 SNBL's, financial institutions, technical assistance
8 providers, and other individuals who have been active in
9 assisting micro-enterprises and SNBL's. Appointed members
10 shall reflect the geographic, cultural, and ethnic diversity
11 of this State.
12 Of the initial appointments, members shall be randomly
13 assigned to staggered terms; 4 members shall be appointed for
14 a term of 3 years, 4 members shall be appointed for a term of
15 2 years, and 3 members shall be appointed for a term of one
16 year. Upon the expiration of each member's term, a successor
17 shall be appointed for a term of 3 years. In the case of a
18 vacancy in the office of any member, a successor shall be
19 appointed for the remainder of the unexpired term by the
20 person designated as responsible for making the appointment.
21 No member shall serve more than 3 consecutive terms. Members
22 shall serve without compensation but shall be reimbursed for
23 expenses incurred in connection with the performance of their
24 duties as members.
25 One of the members shall be designated as chairperson by
26 the Governor. If the Governor does not appoint the
27 chairperson within 60 days after the effective date of this
28 Act, the Council shall convene and elect a chairperson by a
29 simple majority vote. Upon a vacancy in the position of
30 chairperson, the Governor shall have 30 days from the date of
31 the vacancy to appoint a new chairperson. If the Governor
32 does not appoint a new chairperson within 30 days, the
33 Council shall convene and elect a new chairperson by a simple
34 majority vote.
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1 The first meeting of the Council shall be held within 65
2 days after the effective date of this Act. The Council
3 shall meet quarterly and may hold other meetings on the call
4 of the chairperson. Meetings may be held in person or by
5 conference telephone call. Six members constitute a quorum.
6 The Council may adopt rules it deems necessary to govern its
7 procedures. The Department and the Department of Financial
8 Institutions shall cooperate with the Council to fulfill the
9 purposes of this Act and shall provide the Council with
10 dedicated staff and administrative support necessary for the
11 Council to perform its duties under this Act. The Department
12 may apply for grants from the public and private sectors and
13 is authorized to accept grants, gifts, and donations.
14 Section 20. Duties and responsibilities of the Council
15 and the Department.
16 (a) With the advice and assistance of the Council, the
17 Department shall promote micro-enterprise and self-employment
18 as alternatives to welfare and traditional wage-labor
19 employment throughout Illinois.
20 (b) The Council shall conduct hearings, as necessary, and
21 issue an annual report to the Department, the Governor, and
22 the General Assembly regarding the status of micro-enterprise
23 within Illinois. In that regard, the Council shall review
24 the following:
25 (1) The number of micro-enterprises in Illinois and
26 their prospects for business success.
27 (2) The availability of technical assistance
28 services and other programs and incentives for
29 micro-enterprise in Illinois, including entrepreneurial
30 training, legal services, business incubators, insurance
31 and risk-sharing pools, and other business assistance.
32 (3) The availability and sources of microcredit in
33 Illinois.
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1 (4) Barriers to the success of micro-enterprises
2 operating in Illinois and disincentives to persons
3 seeking self-employment as a means of earning a
4 livelihood.
5 (c) The Council shall recommend to the Department, the
6 Governor, and the General Assembly, on an annual basis, all
7 of the following:
8 (1) New initiatives to advocate and promote
9 micro-enterprise and self-employment as alternatives to
10 welfare and traditional wage-labor employment.
11 (2) Programs and incentives to coordinate and fund
12 more efficiently the technical support services required
13 by micro-enterprises in Illinois, including business
14 training, small business incubators, legal services,
15 insurance and risk-sharing pools, communications, and
16 information technology.
17 (3) Ways to assist SNBL's and to encourage the
18 availability of microcredit to micro-enterprises and to
19 other small businesses that may have difficulty obtaining
20 business credit as a consequence of changes in the
21 financial services industry.
22 (4) Better coordination of public and private
23 sector programs and initiatives intended to help and
24 promote self-employment and very small businesses.
25 (5) Changes in State and local laws and practices
26 that disproportionately burden micro-enterprises or that
27 discourage persons from seeking self-employment,
28 including without limitation changes in welfare rules,
29 licensing and permitting requirements, tax laws, and
30 procurement practices.
31 (d) The Department, with the advice and assistance of
32 the Council, shall solicit and apply for grants, matching
33 funds, and other moneys from public and private sources in
34 order to promote micro-enterprise and microcredit in Illinois
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1 and to fund the Council's activities.
2 (e) The Council shall perform the other duties and
3 discharge the other responsibilities conferred upon it by
4 this Act.
5 (f) The Department may hold hearings, take testimony,
6 and request information from State agencies.
7 Section 25. Interactive Micro-Enterprise Resource Guide.
8 The Department, with the advice and assistance of the
9 Council, shall create and maintain an Internet-based resource
10 guide for Illinois micro-enterprises, small businesses,
11 SNBL's, financial institutions, and technical assistance
12 providers. The guide shall provide an up-to-date listing of
13 all programs, counseling services, tax incentives, loans,
14 grants, procurement opportunities, and other assistance
15 offered by any agency of federal, State, or local government
16 that is targeted primarily to benefit self-employed persons
17 and other small business ventures located in any particular
18 location within Illinois. Every State agency and unit of
19 local government shall cooperate with the Council in
20 assembling, reporting, and updating, not less than quarterly
21 in a format specified by the Council, information concerning
22 all programs administered or sponsored by that agency or
23 local governmental unit. The Department, in cooperation with
24 the Council, shall establish reporting regulations that
25 minimize the burden of compliance on reporting entities. The
26 Department shall provide the necessary staff, administrative
27 support, and Internet access in order to create and maintain
28 the guide. The Department may impose user fees on some or all
29 users of the guide to the extent that the Department and the
30 Council believe that fees are advisable.
31 Section 30. Illinois Microcredit Study. The Department,
32 with the advice and assistance of the Council and the
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1 Department of Financial Institutions, shall conduct,
2 complete, and deliver to the Governor and the General
3 Assembly within 24 months following the effective date of
4 this Act a study of microcredit in Illinois. The study shall
5 include but not be limited to the following factors:
6 (1) Assessing the availability of, demand for, and
7 potential for promoting business development of microcredit
8 in Illinois.
9 (2) Investigating the effects of trends in the financial
10 services industry on the ability of very small businesses in
11 Illinois to access business credit.
12 (3) Identifying cost-effective ways of promoting the
13 availability of microcredit in Illinois, which may include
14 State-sponsored loan programs, guarantees, secondary markets
15 for microcredit loans, and statewide coordination of existing
16 microcredit programs.
17 (4) Identifying successful microcredit practices and
18 recommending guidelines for SNBL's and other providers of
19 microcredit in Illinois. The Department of Financial
20 Institutions shall provide the Department and the Council
21 with necessary staff and administrative support in order to
22 conduct, compile, and publish the study.
23 Section 95. Repeal. This Act is repealed December 31,
24 2004.
25 Section 99. Effective date. This Act takes effect upon
26 becoming law.
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