HB0054eng 103RD GENERAL ASSEMBLY

HB0054 Engrossed LRB103 03570 RJT 48576 b

AN ACT concerning agriculture.

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

Section 1. Short title. This Act may be cited as the Local Food Infrastructure Grant Act.

Section 5. Definitions. In this Act:

"Department" means the Department of Agriculture.

"Director" means the Director of Agriculture.

"Fund" means the Local Food Infrastructure Grant Fund.

"Grantee" means the person or entity to which a grant is made from the Fund.

"Lender" means any federal or State chartered bank, federal land bank, production credit association, bank for cooperatives, federal or state chartered savings and loan association or building and loan association, small business investment company, or any other institution qualified within this State to originate and service loans, including, but not limited to, insurance companies, credit unions, and mortgage loan companies. "Lender" includes a wholly owned subsidiary of a manufacturer, seller or distributor of goods or services that makes loans to businesses or individuals, commonly known as a "captive finance company".

"Liability" includes, but is not limited to, the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments; accrued interest payable; and any other liability.

"State" means the State of Illinois.

"Underserved Farmer" means farmers or ranchers who are: Beginning; Socially Disadvantaged; Veterans; and Limited Resource, as defined by the USDA.

"Underserved Community" means communities that have limited or no access to resources or that are otherwise disenfranchised. These groups may include people who are socioeconomically disadvantaged; people with limited English proficiency; geographically isolated or educationally disenfranchised people; people of color as well as those of ethnic and national origin minorities; women and children; individuals with disabilities and others with access and functional needs; and seniors.

"Value-added" means the processing, packaging, or otherwise enhancing the value of farm and agricultural products or by-products produced in Illinois.

Section 10. Legislative findings.

(a) The General Assembly finds that in this State the following conditions exist:

(1) Small fruit, vegetable, and livestock farmers are vital to the health and wealth of Illinois communities, yet Illinois does not currently have infrastructure in place to support local food farmers and feed Illinois communities.

(2) An estimated 95% of the food consumed in Illinois is purchased from outside our borders, resulting in the export of billions of food dollars outside our state instead of building local economies.

(3) A shift of just 10% toward local food purchasing by Illinois individuals, families, schools, institutions, and state agencies could generate billions in economic growth for our state.

(4) In order for Illinois families, businesses, schools, and institutions to shift their purchasing practices, Illinois must invest in supporting critical local food infrastructure needed to scale up production, aggregation, and distribution of local food.

(b) The General Assembly determines and declares that there exist conditions in the State that require the Department to issue grants on behalf of the State for the development of local food processing, aggregation, and distribution.

Section 15. Local Food Infrastructure Grant Program. Subject to appropriation, the Department shall develop and administer an annual Local Food Infrastructure Grant Program to enhance local food processing, aggregation, and distribution within this State.

(1) Eligibility. Eligible applicants must currently or plan to store, process, package, aggregate, or distribute farm products raised in Illinois. Eligible applicants include, but are not limited to:

(A) Illinois farms with less than 50 employees.

(B) Illinois cooperatives with less than 50 employees.

(C) Illinois processing facilities, food businesses, and food hubs, with less than 50 employees.

(D) Illinois non-profit organizations.

(E) Units of local government in Illinois.

Proposals may be submitted by individuals, groups, partnerships, or collaborations.

(2) Award. Grant awards shall be between $1000 and $150,000.

(3) Matching. The recipient of a grant under this Section must provide a percentage for the total project costs. 80% of all funded projects will be required to provide a 50% match. The remaining 20% of funded projects shall be categorized as "high need" and shall be required to provide a 0 to 20% match. The recipient's match may be in cash, cash-equivalent investments, or bonds, irrevocable letters of credit, or any combination thereof. Acceptable matching fund sources include, but are not limited to, commercial and private lenders, leasing companies, and grants.

(4) Allowable expenses. All grant funding must be used for the purchasing, leasing to own, renting, building, or installation of infrastructure that will increase market access of Illinois communities to Illinois agricultural products. Allowable expenses include, but are not limited to:

(A) Equipment used in the production of value-added agricultural products.

(B) Milling or pressing equipment.

(C) Creamery or milk product processing and packaging equipment.

(D) Food hub development or expansion.

(E) Cooler walls and refrigeration units.

(F) Grading, packing, labeling, packaging, or sorting equipment.

(G) Refrigerated trucks.

(H) Custom exempt mobile slaughter units and livestock processing equipment.

(I) Agroforestry processing equipment.

(J) Local fish and shrimp processing.

Grant funding may not be used for labor, marketing, or promotion.

(5) Funding source. The Local Food Infrastructure Grant Fund is created as a special fund in the State treasury. Appropriations and moneys from any public or private source may be deposited into the Fund. The Fund shall be used for the purposes of this Act. Repayments of grants made under this Section shall be deposited into the Fund. A maximum of 10% of all funds appropriated through this fund may be awarded to the Department for administrative costs.

Section 20. Steering Committee. Subject to appropriation, the Department shall create an independent Local Food Infrastructure Steering Committee to guide the implementation and evaluation of the grant. The committee shall be selected by the Director. The committee shall include, but is not limited to, at least 3 farmers, including one specialty crop farmer, one livestock farmer, and one farmer of color, one representative from the local food processing industry, one representative from a non-profit organization serving farmers of color, one representative from a non-profit organization serving farmers at large, and one representative from the Department.

(1) The Steering Committee's responsibilities shall include:

(A) Determining the grant funding cycle.

(B) Determining Application Requirements and terms of the grant agreement.

(C) Determining grant criteria and preferences in addition to those specified in this Act.

(D) Grant review and selection.

(E) Determining project reporting requirements for funded projects.

(F) Evaluating program success and adjusting criteria, requirements, preferences, implementation, and all other elements of the grant as needed to ensure the grant program meets its intended purpose, so long as changes are in compliance with this Act.

(2) Application requirements. Grant applications must be made on forms provided by the Department and in accordance with procedures established by the Steering Committee. At a minimum, an applicant must be an Illinois resident, as defined by Department rule, and must provide the names, addresses, and occupations of all project owners, the project address, relevant credit and financial information (including, but not limited to, assets and liabilities), and any other information deemed necessary by the Steering Committee for review of the grant application.

(A) All requests for the waiver of any requirements in this Section must be made in writing to the Department. A grant award is subject to modification or alteration under, but is not limited to, the following conditions:

(i) The grant award is subject to any modifications that may be required by changes in State law or regulations. The Department shall notify the recipient in writing of any amendment to the regulations and the effective date of those amendments.

(ii) If either the Department or the recipient requests to modify the terms of the grant award, written notice of the proposed modification shall be given to the other party. No modification shall take effect unless agreed to in writing by both the Department and the recipient.

(3) Grant review process.

(A) Criteria. The Steering Committee, in reviewing the applications, must consider, but is not limited to considering the following criteria:

(i) The project has a reasonable assurance of increasing the availability and accessibility of Illinois agricultural products among Illinois communities.

(ii) There is an adequate and realistic budget projection.

(iii) The application meets the eligibility requirements and the project costs are eligible under this Act.

(B) Preference. Preference for grants shall be given to, but is not limited to, the following:

(i) Proposals that have established favorable community support.

(ii) Proposals that have a positive economic impact on the State's local food sector.

(iii) Proposals that increase the availability of Illinois agricultural products to underserved communities in Illinois.

(iv) Proposals that positively impact underserved farmers in Illinois.

(v) Established farmers and food businesses.

(vi) Proposals that facilitate long-term economic development in the local food sector.

(C) High Need Determination. The Steering Committee shall select all applications for funding, and from this selection shall determine 20% of applications to qualify as high need projects that are eligible for a lower match requirement of 0 to 25%. To qualify as a high need project, the independent Steering Committee shall consider, but is not limited to considering the following criteria:

(i) Proposals submitted by underserved farmers.

(ii) Proposals that will positively impact underserved communities.

(iii) Proposals that are submitted by small and very small farms and food businesses.

Section 25. Report. The Director must file with the Governor and General Assembly, and publish publicly on or before March 1 of each year a written report detailing the impact of the Local Food Infrastructure Grant for the previous calendar year. The report must include a complete list of: (1) all applications for grants under the Local Food Infrastructure Grant Program during the previous calendar year; (2) all persons that were awarded the Local Food Infrastructure Grant and the nature and amount of their awards in the previous calendar year; and (3) the economic impact of the grant from the previous calendar year, which may include jobs created, local food sales increases, and communities served.

Section 30. Liability. The Director, Local Food Infrastructure Steering Committee, any Department employee, or any authorized person executing grants is not personally liable on the grants and is not subject to any personal liability or accountability by reason of the issuance of the grants.

Section 35. Default or termination of grant agreement. If the recipient of a grant violates any of the terms of the grant agreement, the Department shall send a written notice to the recipient that he or she is in default and be given the opportunity to correct the violations.

(1) If the violation is not corrected within 30 days after receipt of the notification, the Director may take, but is not limited to, one or more of the following actions:

(A) Declare due and payable the amount of the grant, or any portion of it, and cease additional grant payments not yet made to the recipient.

(B) Take any other action considered appropriate to protect the interest of the project.

(2) The Department may determine that a recipient has failed to faithfully perform the terms and conditions of the scope of work of the project when:

(A) The Department has notified the recipient in writing of the existence of circumstances such as misapplication of grant funds, failure to match Department funds, evidence of fraud and abuse, repeated failure to meet performance timelines or standards, or failure to resolve negotiated points of the agreement.

(B) The recipient fails to develop and implement a corrective action plan within 30 calendar days of the Department's notice.

(3) A grant may be terminated under, but termination is not limited to, any of the following circumstances:

(A) In the absence of State funding for a specific year, all grants that year will be terminated in full. In the event of a partial loss of State funding, the Department may make proportionate cuts to all recipients.

(B) If the Department determines that the recipient has failed to comply with the terms and conditions of the grant agreement, the Department may terminate the grant in whole, or in part, at any time before the date of completion.

(C) The Department may terminate the grant in whole, or in part, when the Department determines that the continuation of the project would not produce beneficial results commensurate with the further expenditures of funds.

(D) The recipient may refuse or elect not to complete the grant agreement and terminate the grant. The recipient shall notify the Department within 10 days after the date upon which performance ceases. The Department may declare due and payable the amount of the grant and may cease additional grant payments not yet made to the grantee.

(4) Any moneys collected from the default or termination of a grant shall be placed into the Fund and expended for the purposes of this Act.

Section 40. Construction. This Act is necessary for the welfare of this State and must be liberally construed to effect its purposes. The Department may adopt rules that are consistent with and necessary for the administration of this Act.

Section 90. The State Finance Act is amended by adding Section 5.990 as follows:

(30 ILCS 105/5.990 new)

Sec. 5.990. The Local Food Infrastructure Grant Fund.

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