Sen. Dan Kotowski

Filed: 3/26/2012

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 3243

2    AMENDMENT NO. ______. Amend Senate Bill 3243, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 1. Short title. This Act may be cited as the
6Microloan Program Act.
 
7    Section 5. Definitions. For purposes of this Act:
8    "Department" means the Department of Commerce and Economic
9Opportunity.
10    "Director" means the Director of Commerce and Economic
11Opportunity.
12    "Intermediary" means: (i) a private, non-profit entity;
13(ii) a private, non-profit community development corporation;
14(iii) a consortium of private, non-profit organizations or
15non-profit community development corporations; or (iv) a
16quasi-governmental economic development entity (such as a

 

 

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1planning and development district) if no application is
2received from an eligible non-profit organization or the
3Director determines that the needs of a region or geographic
4area are not adequately served by an existing, eligible
5non-profit organization that has submitted an application.
6"Intermediary" also includes an intermediary that has
7completed the training program created and administered by the
8Director under Section 50.
9    "Microloan" means a short-term, fixed rate loan of not more
10than $35,000, made by an intermediary to a small business
11concern.
12    "Rural area" means any political subdivision or
13unincorporated area: (i) in a non-metropolitan county (as
14defined by the Secretary of Agriculture) or its equivalent; or
15(ii) in a metropolitan county or its equivalent that has a
16resident population of less than 20,000 if the Department of
17Commerce and Economic Opportunity has determined such a
18political subdivision or area to be rural.
19    "Small business concern" means a legal entity, including a
20corporation, partnership, or sole proprietorship, that: (i) is
21formed for the purpose of making a profit; (ii) is
22independently owned and operated; and (iii) has 5 employees or
23fewer.
 
24    Section 10. Purposes. The purposes of the Microloan Program
25are:

 

 

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1        (1) to assist female, low-income, veteran, and
2    minority entrepreneurs and business owners and other
3    individuals possessing the capability to operate
4    successful business concerns;
5        (2) to assist small business concerns in those areas
6    suffering from a lack of credit due to economic downturns;
7        (3) to establish a microloan program to be administered
8    by the Department of Commerce and Economic Opportunity in
9    order to:
10            (A) make grants to eligible intermediaries to
11        enable those intermediaries to provide small-scale
12        loans to small business concerns for working capital or
13        the acquisition of materials, supplies, or equipment;
14        and
15            (B) make grants to eligible intermediaries that,
16        together with non-State matching funds, will enable
17        those intermediaries to provide intensive marketing,
18        management, and technical assistance to microloan
19        borrowers.
 
20    Section 15. Microloan program established. Subject to
21appropriation, a microloan program is established in the
22Department of Commerce and Economic Opportunity under which the
23Director of Commerce and Economic Opportunity may:
24        (1) make grants to eligible intermediaries, as
25    provided under Section 25, for the purpose of making

 

 

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1    short-term, fixed interest rate microloans to small
2    business concerns;
3        (2) in conjunction with these grants and subject to the
4    requirements of Section 30, make grants to these
5    intermediaries for the purpose of providing intensive
6    marketing, management, and technical assistance to small
7    business concerns that are borrowers under this Act; and
8        (3) issue grants to administer a training program to
9    train intermediaries in the knowledge, skills, and
10    understanding of microlending necessary to operate
11    successful microloan programs.
 
12    Section 20. Eligibility for participation. An intermediary
13shall be eligible to receive loans and grants under paragraphs
14(1) and (2) of Section 15 if it meets the definition of
15intermediary in Section 5.
 
16    Section 25. Grants to intermediaries.
17    (a) As part of its application for a grant, each
18intermediary shall submit a description to the Director of the
19type of businesses to be assisted; the size and range of loans
20to be made; the geographic area to be served and its economic,
21poverty, and unemployment characteristics; the status of small
22business concerns in the area to be served and an analysis of
23their credit and technical assistance needs; any marketing,
24management, and technical assistance to be provided in

 

 

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1connection with a loan made under this Act; the local economic
2credit markets, including the costs associated with obtaining
3credit locally; the qualifications of the applicant to carry
4out the purpose of this Act; and any plan to involve other
5technical assistance providers or private sector lenders in
6assisting selected business concerns.
7    (b) As a condition of any grant made to an intermediary
8under paragraph (2) of Section 15, the Department shall require
9the intermediary to contribute not less than 15% of the grant
10amount in cash as a match from non-State sources.
11    (c) No grant shall be made to an intermediary under this
12Act if the total amount outstanding and committed to that
13intermediary (excluding outstanding grants) from the Business
14Microloan and Investment Fund would, as a result of that grant,
15exceed $750,000 in the first year of the intermediary's
16participation in the program or $3,500,000 in later years of
17the intermediary's participation in the program.
18    (d) An intermediary may make a loan under this Act of not
19more than $35,000 to a small business concern only if the small
20business concern demonstrates that it is unable to obtain
21credit elsewhere at comparable interest rates and that it has
22good prospects for success. In no case shall an intermediary
23commit to any one borrower more than $35,000.
 
24    Section 30. Marketing, management, and technical
25assistance grants to intermediaries. The Department may make

 

 

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1grants to intermediaries that receive a grant under paragraph
2(1) of Section 15 to provide marketing, management, and
3technical assistance to small business concerns that are
4prospective borrowers or borrowers under this Act.
 
5    Section 35. Program funding for microloans. Under the
6program authorized by this Act, the Department may fund, on a
7competitive basis, not more than 300 intermediaries annually.
 
8    Section 40. Equitable distribution of intermediaries. In
9approving intermediaries and providing funding to
10intermediaries under this Act, the Department shall select and
11provide funding to intermediaries as will ensure appropriate
12availability of loans for small businesses in all industries
13located throughout the State, particularly those located in
14urban and in rural areas.
 
15    Section 45. Grants for management, marketing, technical
16assistance, and related services.
17    (a) The Department may procure technical assistance for
18intermediaries participating in the Microloan Program to
19ensure that those intermediaries have the knowledge, skills,
20and understanding of microlending practices necessary to
21operate successful microloan programs.
22    (b) The General Assembly may appropriate up to 7% of the
23balance in the Business Microloan and Investment Fund to the

 

 

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1Department for the specific purpose of providing one or more
2technical assistance grants to experienced microlending
3organizations that have demonstrated experience in providing
4training support for microenterprise development and financing
5to achieve the purposes set forth in Section 10.
 
6    Section 50. Training program.    The Department may issue
7grants to administer a training program for intermediaries that
8presently have minimal or no expertise or experience in
9microlending. The training program shall train the
10intermediaries in the knowledge, skills, and understanding of
11microlending practices necessary to operate successful
12microloan programs.
 
13    Section 55. Report to General Assembly. On November 1,
142014, the Department shall submit to the General Assembly a
15report, including the Department's evaluation of the
16effectiveness of the microloan program and the following:
17        (1) the numbers and locations of the intermediaries
18    funded to conduct microloan programs;
19        (2) the amounts of each grant to intermediaries;
20        (3) a description of the matching contributions of each
21    intermediary;
22        (4) the numbers and amounts of microloans made by the
23    intermediaries to small business concern borrowers;
24        (5) a summary of the repayment history of each

 

 

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1    intermediary;
2        (6) a description of the loan portfolio of each
3    intermediary including the extent to which it provides
4    microloans to small business concerns in rural areas; and
5        (7) any recommendations for legislative changes that
6    would improve program operations.
 
7    Section 60. Business Microloan and Investment Fund. The
8Business Microloan and Investment Fund is created as a special
9fund in the State treasury to accept appropriations, grants,
10gifts, and other donations made to fund the Microloan Program
11created by this Act. Moneys in the Fund may, subject to
12appropriation, be used by the Department to carry out the
13requirements of this Act.
 
14    Section 95. The State Finance Act is amended by adding
15Section 5.811 as follows:
 
16    (30 ILCS 105/5.811 new)
17    Sec. 5.811. The Business Microloan and Investment Fund.".