100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2698

 

Introduced , by Rep. Arthur Turner

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 750/9-3  from Ch. 127, par. 2709-3
30 ILCS 750/9-4  from Ch. 127, par. 2709-4
30 ILCS 750/9-4.2  from Ch. 127, par. 2709-4.2
30 ILCS 750/9-4.3  from Ch. 127, par. 2709-4.3

    Amends the Build Illinois Act. Provides that the Department of Commerce and Economic Opportunity may also make loans or equity investments to small businesses with moneys in the State Small Business Credit Initiative Fund (currently, the Department make only make such loans and equity investments with moneys in the Build Illinois Bond Fund, the Illinois Capital Revolving Fund, or the Illinois Equity Revolving Fund). Provides that the Department of Commerce and Economic Opportunity may make loans to small businesses of up to $2,000,000 (currently, $750,000) per project. Provides that moneys collected from the fees imposed under this Act connected with the Capital Fund shall be deposited into the Capital Fund. Provides that loans under the minority, veteran, female, and persons with a disability loan program shall not exceed $400,000 (currently, $100,000) without a waiver from the Director of Commerce and Economic Opportunity. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2698LRB100 08759 HLH 18897 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Build Illinois Act is amended by changing
5Sections 9-3, 9-4, 9-4.2, and 9-4.3 as follows:
 
6    (30 ILCS 750/9-3)  (from Ch. 127, par. 2709-3)
7    Sec. 9-3. Powers and duties. The Department has the power:
8    (a) To make loans or equity investments to small
9businesses, and to make loans or grants or investments to or
10through financial intermediaries. The loans and investments
11shall be made from appropriations from the Build Illinois Bond
12Fund, Illinois Capital Revolving Loan Fund, State Small
13Business Credit Initiative Fund, or Illinois Equity Revolving
14Fund for the purpose of promoting the creation or retention of
15jobs within small businesses or to modernize or maintain
16competitiveness of firms in Illinois. The grants shall be made
17from appropriations from the Build Illinois Bond Fund or
18Illinois Capital Revolving Loan Fund for the purpose of
19technical assistance.
20    (b) To make loans to or investments in businesses that have
21received federal Phase I Small Business Innovation Research
22grants as a bridge while awaiting federal Phase II Small
23Business Innovation Research grant funds.

 

 

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1    (c) To enter into interagency agreements, accept funds or
2grants, and engage in cooperation with agencies of the federal
3government, local units of government, universities, research
4foundations, political subdivisions of the State, financial
5intermediaries, and regional economic development corporations
6or organizations for the purposes of carrying out this Article.
7    (d) To enter into contracts, financial intermediary
8agreements, or any other agreements or contracts with financial
9intermediaries necessary or desirable to further the purposes
10of this Article. Any such agreement or contract may include,
11without limitation, terms and provisions including, but not
12limited to loan documentation, review and approval procedures,
13organization and servicing rights, and default conditions.
14    (e) To fix, determine, charge and collect any premiums,
15fees, charges, costs and expenses, including without
16limitation, any application fees, commitment fees, program
17fees, financing charges, collection fees, training fees, or
18publication fees in connection with its activities under this
19Article and to accept from any source any gifts, donations, or
20contributions of money, property, labor, or other things of
21value to be held, used, and applied to carry out the purposes
22of this Article. All fees, charges, collections, gifts,
23donations, or other contributions shall be deposited into the
24Illinois Capital Revolving Loan Fund, or the State Small
25Business Credit Initiative Fund.
26    (f) To establish application, notification, contract, and

 

 

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1other forms, procedures, rules or regulations deemed necessary
2and appropriate.
3    (g) To consent, subject to the provisions of any contract
4with another person, whenever it deems it necessary or
5desirable in the fulfillment of the purposes of this Article,
6to the modification or restructuring of any financial
7intermediary agreement, loan agreement or any equity
8investment agreement to which the Department is a party.
9    (h) To take whatever actions are necessary or appropriate
10to protect the State's interest in the event of bankruptcy,
11default, foreclosure, or noncompliance with the terms and
12conditions of financial assistance or participation provided
13hereunder or to otherwise protect or affect the State's
14interest, including the power to sell, dispose, lease or rent,
15upon terms and conditions determined by the Director to be
16appropriate, real or personal property which the Department may
17receive as a result thereof.
18    (i) To deposit any "Qualified Securities" which have been
19received by the Department as the result of any financial
20intermediary agreement, loan, or equity investment agreement
21executed in the carrying out of this Act, with the Office of
22the State Treasurer and held by that office until agreement to
23transfer such qualified security shall be certified by the
24Director of Commerce and Economic Opportunity.
25    (j) To assist small businesses that seek to apply for
26public or private capital in preparing the application and to

 

 

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1supply them with grant information, plans, reports,
2assistance, or advice on development finance and to assist
3financial intermediaries and participating lenders to build
4capacity to make debt or equity investments through
5conferences, workshops, seminars, publications, or any other
6media.
7    (k) To provide for staff, administration, and related
8support required to manage the programs authorized under this
9Article and pay for staffing and administration from the
10Illinois Capital Revolving Loan Fund, or the State Small
11Business Credit Initiative Fund, as appropriated by the General
12Assembly. Administration responsibilities may include, but are
13not limited to, research and identification of credit
14disadvantaged groups; design of comprehensive statewide
15capital access plans and programs addressing capital gap and
16capital marketplace structure and information barriers;
17direction, management, and control of specific projects; and
18communicate and cooperation with public development finance
19organizations and private debt and equity sources.
20    (l) To exercise such other powers as are necessary or
21incidental to the foregoing.
22(Source: P.A. 94-91, eff. 7-1-05.)
 
23    (30 ILCS 750/9-4)  (from Ch. 127, par. 2709-4)
24    Sec. 9-4. Intermediary agreements and loans. Any loan made
25pursuant to this Article shall:

 

 

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1    (a) Be made only if a participating lender or other
2investor also provides a portion of the financing with respect
3to the project. The participating lender's or other investor's
4risk assumption may be in the form of a loan, letter of credit,
5guarantee, loan participation, bond purchase, or any other form
6approved by the Department;
7    (b) Finance no more than the lesser of 25% of the total
8amount of any single project, or $2,000,000 $750,000 for any
9single project, unless such limitations are waived by the
10Director, upon a finding that such waiver is appropriate to
11accomplish the purposes of this Article;
12    (c) Be made only if the Department determines, on the basis
13of all information available to it, that the project would not
14be undertaken unless the loan is provided;
15    (d) Be protected by security which may include, as
16available, first or second mortgage positions on real or
17personal property, royalty payments on sales of products or
18services, or any other security satisfactory to the Department
19to secure payment of the loan agreement. Personal notes or
20guarantees may be required from persons owning more than 20
21percent of the small business;
22    (e) Be in such amount and form and contain such terms and
23provisions with respect to property insurance, repairs,
24alterations, payment of taxes and assessments, delinquency
25charges, default remedies, additional security, and other
26matters as the Department shall determine adequate to protect

 

 

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1the public interest;
2    (f) Be made to a business approved by the Department as
3responsible and creditworthy;
4    (g) Be reviewed by the credit review committee established
5by the Department pursuant to this Article;
6    (h) Be made only after the Department has made a
7determination that the loan agreement will cause a project to
8be undertaken which has the potential to create or retain
9substantial employment or to modernize or improve the
10competitiveness of the firm in relation to the amount of the
11loan;
12    (i) Be made with businesses that have certified the project
13is a new plant start-up, modernization, or expansion or a new
14venture opportunity and is not relocation of an existing
15business from another site within the State unless that
16relocation results in substantial employment growth.
17(Source: P.A. 88-422.)
 
18    (30 ILCS 750/9-4.2)  (from Ch. 127, par. 2709-4.2)
19    Sec. 9-4.2. Illinois Capital Revolving Loan Fund.
20    (a) There is hereby created the Illinois Capital Revolving
21Loan Fund, hereafter referred to in this Article as the
22"Capital Fund" to be held as a separate fund within the State
23Treasury.
24    The purpose of the Capital Fund is to finance intermediary
25agreements, administration, technical assistance agreements,

 

 

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1loans, grants, or investments in Illinois. In addition, funds
2may be used for a one time transfer in fiscal year 1994, not to
3exceed the amounts appropriated, to the Public Infrastructure
4Construction Loan Revolving Fund for grants and loans pursuant
5to the Public Infrastructure Loan and Grant Program Act.
6Investments, administration, grants, and financial aid shall
7be used for the purposes set for in this Article. Loan
8financing will be in the form of loan agreements pursuant to
9the terms and conditions set forth in this Article. All loans
10shall be conditioned on the project receiving financing from
11participating lenders or other investors. Loan proceeds shall
12be available for project costs, except for debt refinancing.
13    (b) There shall be deposited in the Capital Fund such
14amounts, including but not limited to:
15        (i) All receipts, including dividends, principal and
16    interest payments and royalties, from any applicable loan,
17    intermediary, or technical assistance agreement made from
18    the Capital Fund or from direct appropriations from the
19    Build Illinois Bond Fund or the Build Illinois Purposes
20    Fund (now abolished) or the General Revenue Fund by the
21    General Assembly entered into by the Department;
22        (ii) All proceeds of assets of whatever nature received
23    by the Department as a result of default or delinquency
24    with respect to loan agreements made from the Capital Fund
25    or from direct appropriations by the General Assembly,
26    including proceeds from the sale, disposal, lease or rental

 

 

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1    of real or personal property which the Department may
2    receive as a result thereof;
3        (iii) Any appropriations, grants or gifts made to the
4    Capital Fund;
5        (iv) Any income received from interest on investments
6    of moneys in the Capital Fund;
7        (v) All moneys resulting from the collection of
8    premiums, fees, charges, costs, and expenses in connection
9    with the Capital Fund as described in subsection (e) of
10    Section 9-3.
11    (c) The Treasurer may invest moneys in the Capital Fund in
12securities constituting obligations of the United States
13Government, or in obligations the principal of and interest on
14which are guaranteed by the United States Government, in
15obligations the principal of and interest on which are
16guaranteed by the United States Government, or in certificates
17of deposit of any State or national bank which are fully
18secured by obligations guaranteed as to principal and interest
19by the United States Government.
20(Source: P.A. 94-91, eff. 7-1-05; 94-392, eff. 8-1-05; 95-331,
21eff. 8-21-07.)
 
22    (30 ILCS 750/9-4.3)  (from Ch. 127, par. 2709-4.3)
23    Sec. 9-4.3. Minority, veteran, female and disability
24loans.
25    (a) In the making of loans for minority, veteran, female or

 

 

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1disability small businesses, as defined below, the Department
2is authorized to employ different criteria in lieu of the
3general provisions of subsections (b), (d), (e), (f), (h), and
4(i) of Section 9-4.
5    Minority, veteran, female or disability small businesses,
6for the purpose of this Section, shall be defined as small
7businesses that are, in the Department's judgment, at least 51%
8owned and managed by one or more persons who are minority or
9female or who have a disability or who are veterans.
10    (b) Loans made pursuant to this Section:
11        (1) Shall not exceed $400,000 $100,000 or 50% of the
12    business project costs unless the Director of the
13    Department determines that a waiver of these limits is
14    required to meet the purposes of this Act.
15        (2) Shall only be made if, in the Department's
16    judgment, the number of jobs to be created or retained is
17    reasonable in relation to the loan funds requested.
18        (3) Shall be protected by security. Financial
19    assistance may be secured by first, second or subordinate
20    mortgage positions on real or personal property, by royalty
21    payments, by personal notes or guarantees, or by any other
22    security satisfactory to the Department to secure
23    repayment. Security valuation requirements, as determined
24    by the Department, for the purposes of this Section, may be
25    less than required for similar loans not covered by this
26    Section, provided the applicants demonstrate adequate

 

 

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1    business experience, entrepreneurial training or
2    combination thereof, as determined by the Department.
3        (4) Shall be in such principal amount and form and
4    contain such terms and provisions with respect to security,
5    insurance, reporting, delinquency charges, default
6    remedies, and other matters as the Department shall
7    determine appropriate to protect the public interest and
8    consistent with the purposes of this Section. The terms and
9    provisions may be less than required for similar loans not
10    covered by this Section.
11(Source: P.A. 99-143, eff. 7-27-15.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.