Illinois General Assembly - Full Text of HB3267
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Full Text of HB3267  98th General Assembly


Rep. William Davis

Filed: 3/19/2013





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2    AMENDMENT NO. ______. Amend House Bill 3267 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Department of Transportation Law of the
5Civil Administrative Code of Illinois is amended by adding
6Section 2705-610 as follows:
7    (20 ILCS 2705/2705-610 new)
8    Sec. 2705-610. Disadvantaged business revolving loan and
9grant program.
10    (a) Purpose. The purpose of this Section is to provide for
11assistance to disadvantaged business enterprises with project
12financing costs for those firms that are ready, willing, and
13able to participate on Department construction contracts. The
14Department's disparity study recommends and supports a
15financing program to address this barrier faced by
16disadvantaged business enterprises.



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1    (b) For the purposes of this Section:
2    "Construction" means building, altering, repairing,
3improving, or demolishing any public structure or building, or
4making improvements of any kind to public real property.
5Construction does not include the routine operation, routine
6repair, or routine maintenance of existing structures,
7buildings, or real property.
8    "Construction-related services" means those services
9including construction design, layout, inspection, support,
10feasibility or location study, research, development,
11planning, or other investigative study undertaken by a
12construction agency concerning construction or potential
14    "Contractor" means one who participates, through a
15contract or subcontract at any tier, in a United States
16Department of Transportation-assisted or Illinois Department
17of Transportation-assisted highway, rail, transit, or airport
19    "Escrow account" means a fiduciary account established
20with (1) a banking corporation which is both organized under
21the Illinois Banking Act and authorized to accept and
22administer trusts in this State; or (2) a national banking
23association which has its principal place of business in this
24State and which is authorized to accept and administer trusts
25in this State.
26    "Fund Control Agent" means a person who provides managerial



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1and technical assistance to disadvantage business enterprises
2and holds the authority to manage a loan under this Section.
3The Fund Control Agent will be procured by the Department under
4a request for proposal process governed by the Illinois
5Procurement Code and rules adopted under that Code.
6    "Loan" or "loan assistance funds" means a low-interest line
7of credit made available to a selected disadvantaged business
8enterprise under this program for the purposes set forth in
9subsection (f) below.
10    (c) The Department may enter into agreements to make loans
11to disadvantaged business enterprises certified by the
12Department for participation on Department-procured
13construction and construction-related contracts. For purposes
14of this Section, the term "disadvantaged business enterprise"
15has the meaning ascribed to it by 49 CFR Part 26.
16    The Department shall establish a loan selection committee
17to review applications and select eligible disadvantaged
18business enterprises for low-interest loans under this
19program. A selection committee shall be comprised of at least 3
20members appointed by the Secretary of the Department and shall
21include at least one public member from the construction or
22financing industry. The public member may not be employed or
23associated with any disadvantaged business enterprise holding
24a contract with the Department nor may the public member's firm
25be considered for a contract with the Department while he or
26she is serving as a public member of the committee. Terms of



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1service for public members shall not exceed 5 years. No public
2member of the loan selection committee shall hold consecutive
3terms, nor shall any member receive any compensation other than
4for reasonable expenses for service related to this committee.
5    The Department shall establish through administrative
6rules the requirements for eligibility and criteria for loan
7applications, approved use of funds, amount of loans, interest
8rates, collateral, and terms. The Department is authorized to
9adopt rules to implement this Section.
10    (d) Loan funds shall be disbursed to the escrow account,
11subject to appropriation, from the Working Capital Revolving
12Loan Fund established as a special fund in the State treasury.
13Loaned funds that are repaid to the Department shall be
14deposited into the Working Capital Revolving Loan Fund. Other
15appropriations, grants, awards, and donations to the
16Department for the purpose of the revolving loan program
17established by this Section shall be deposited into the Working
18Capital Revolving Loan Fund.
19    (e) A funds control process shall be established to serve
20as an intermediary between the Department and the contractor to
21verify payments and to ensure paperwork is properly filed. The
22Fund Control Agent and contractor shall enter into an agreement
23regarding the control and disbursement of all payments to be
24made by the Fund Control Agent under the contract. The
25Department shall authorize and direct the Fund Control Agent to
26review all disbursement requests and supporting documents



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1received from the contractor. The Fund Control Agent shall
2direct the escrow account to disburse escrow funds to the
3subcontractor, material supplier, and other appropriate
4entities by written request for the disbursement. The
5disadvantaged business enterprise shall maintain control over
6its business operations by directing the payments of the loan
7funds through its relationship with the Funds Control Agent.
8The funds control process shall require the Fund Control Agent
9to intercept payments made from a contractor to a subcontractor
10receiving a loan made under this Act and allow the Fund Control
11Agent to deduct any unpaid loan repayments owed to the State
12before releasing the payment to the subcontractor.
13    (f) Loan assistance funds shall be allowed for current
14liabilities or working capital expenses associated with
15participation in the performance of contracts procured and
16awarded by the Department for transportation construction and
17construction-related purposes. Loan funds shall not be used
19        (1) refinancing or payment of existing long-term debt;
20        (2) payment of non-current taxes;
21        (3) payments, advances, or loans to stockholders,
22    officers, directors, partners, or member owners of limited
23    liability companies; or
24        (4) the purchase or lease of non-construction motor
25    vehicles or equipment.
26    The loan agreement shall provide for the terms and



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1conditions of repayment which shall not extend repayment longer
2than final payment made by the Department following completion
3and acceptance of the work authorized for loan assistance under
4the program. The funds shall be loaned with interest.
5    (g) The number of loans one disadvantaged business
6enterprise may receive under this program is limited to 3.
7Loans shall not be granted simultaneously. An applicant shall
8not be permitted to obtain a loan under this program for a
9different and additional project until payment in full of any
10outstanding loans granted under this program have been received
11by the Department.
12    (h) The rate of interest for any loan shall be set by rule.
13    (i) The loan amount to any successful applicant shall not
14exceed 55% percent of the contract or subcontract supporting
15the loan.
16    (j) Nothing in this Section shall impair the contractual
17rights of the Department and the prime contractor or the
18contractual rights between a prime contractor and
20    (k) Nothing in this Section is intended nor shall be
21construed to vest applicants denied funds by the Department in
22accordance with this Section a right to challenge, protest, or
23contest the awarding of funds by the Department to successful
24applicants or any loan or agreement executed in connection with
26    (l) The debt delinquency prohibition under Section 50-11 of



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1the Illinois Procurement Code applies to any future contracts
2or subcontracts in the event of a loan default.
3    (m) Investment income which is attributable to the
4investment of moneys in the Working Capital Revolving Loan Fund
5shall be retained in the Working Capital Revolving Loan Fund.
6    (n) By January 1, 2014 and January 1 of each succeeding
7year, the Department shall report to the Governor and the
8General Assembly on the utilization and status of the revolving
9loan program. The report shall, at a minimum, include the
10amount transferred from the Road Fund to the Working Capital
11Revolving Loan Fund, the number and size of approved loans, the
12amounts disbursed to and from the escrow account, the amounts,
13if any, repaid to the Working Capital Revolving Loan Fund, the
14interest and fees paid by loan recipients, and the interest
15earned on balances in the Working Capital Revolving Loan Fund,
16and the names of any contractors who are delinquent or in
17default of payment.
18    (o) The Department's authority to execute additional loans
19or request transfers to the Working Capital Revolving Loan Fund
20expires on June 1, 2018. The Comptroller shall order
21transferred and the Treasurer shall transfer any available
22balance remaining in the Working Capital Revolving Loan Fund to
23the Road Fund on January 1, 2019, or as soon thereafter as may
24be practical. Any loan repayments, interest, or fees that are
25by the terms of a loan agreement payable to the Working Capital
26Revolving Loan Fund after June 20, 2018 shall instead be paid



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1into the Road Fund as the successor fund to the Working Capital
2Revolving Loan Fund.
3    Section 10. The State Finance Act is amended by adding
4Sections 5.826 and 8r as follows:
5    (30 ILCS 105/5.826 new)
6    Sec. 5.826. The Working Capital Revolving Loan Fund.
7    (30 ILCS 105/8r new)
8    Sec. 8r. Transfer to the Working Capital Revolving Loan
10    (a) Except as provided in subsection (b), upon the written
11request of the Secretary of Transportation, the State
12Comptroller shall order and the State Treasurer shall transfer
13amounts not to exceed $3,000,000 in aggregate during a fiscal
14year, for a period of 5 years, from the Road Fund to the
15Working Capital Revolving Loan Fund as requested by the
16Secretary of Transportation or as soon thereafter as may be
18    (b) No transfer may be requested or ordered if the
19available balance in the Working Capital Revolving Loan Fund is
20equal to or greater than $6,000,000.
21    Section 99. Effective date. This Act takes effect July 1,