Full Text of SB3113 100th General Assembly
SB3113 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB3113 Introduced 2/15/2018, by Sen. Mattie Hunter SYNOPSIS AS INTRODUCED: | | |
Amends the Department of Transportation Law of the Civil Administrative Code of
Illinois. Makes a technical change
in a Section concerning the disadvantaged business revolving loan and grant program.
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| | A BILL FOR |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Department of Transportation Law of the
| 5 | | Civil Administrative Code of Illinois is amended by changing | 6 | | Section 2705-610 as follows: | 7 | | (20 ILCS 2705/2705-610) | 8 | | Sec. 2705-610. Disadvantaged business revolving loan and | 9 | | grant program. | 10 | | (a) Purpose. The purpose of this this Section is to provide | 11 | | for assistance to disadvantaged business enterprises with | 12 | | project financing costs for those firms that are ready, | 13 | | willing, and able to participate on Department construction | 14 | | contracts. The Department's disparity study recommends and | 15 | | supports a financing program to address this barrier faced by | 16 | | disadvantaged business enterprises. | 17 | | (b) For the purposes of this Section: | 18 | | "Construction" means building, altering, repairing, | 19 | | improving, or demolishing any public structure or building, or | 20 | | making improvements of any kind to public real property. | 21 | | Construction does not include the routine operation, routine | 22 | | repair, or routine maintenance of existing structures, | 23 | | buildings, or real property. |
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| 1 | | "Construction-related services" means those services | 2 | | including construction design, layout, inspection, support, | 3 | | feasibility or location study, research, development, | 4 | | planning, or other investigative study undertaken by a | 5 | | construction agency concerning construction or potential | 6 | | construction. | 7 | | "Contractor" means one who participates, through a | 8 | | contract or subcontract at any tier, in a United States | 9 | | Department of Transportation-assisted or Illinois Department | 10 | | of Transportation-assisted highway, rail, transit, or airport | 11 | | program. | 12 | | "Escrow account" means a fiduciary account established | 13 | | with (1) a banking corporation which is both organized under | 14 | | the Illinois Banking Act and authorized to accept and | 15 | | administer trusts in this State; or (2) a national banking | 16 | | association which has its principal place of business in this | 17 | | State and which is authorized to accept and administer trusts | 18 | | in this State. | 19 | | "Fund Control Agent" means a person who provides managerial | 20 | | and technical assistance to disadvantaged business enterprises | 21 | | and holds the authority to manage a loan under this Section. | 22 | | The Fund Control Agent will be procured by the Department under | 23 | | a request for proposal process governed by the Illinois | 24 | | Procurement Code and rules adopted under that Code. | 25 | | "Loan" or "loan assistance funds" means a low-interest line | 26 | | of credit made available to a selected disadvantaged business |
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| 1 | | enterprise under this program for the purposes set forth in | 2 | | subsection (f) below. | 3 | | (c) The Department may enter into agreements to make loans | 4 | | to disadvantaged business enterprises certified by the | 5 | | Department for participation on Department-procured | 6 | | construction and construction-related contracts. For purposes | 7 | | of this Section, the term "disadvantaged business enterprise" | 8 | | has the meaning ascribed to it by 49 CFR Part 26. | 9 | | The Department shall establish a loan selection committee | 10 | | to review applications and select eligible disadvantaged | 11 | | business enterprises for low-interest loans under this | 12 | | program. A selection committee shall be comprised of at least 3 | 13 | | members appointed by the Secretary of the Department and shall | 14 | | include at least one public member from the construction or | 15 | | financing industry. The public member may not be employed or | 16 | | associated with any disadvantaged business enterprise holding | 17 | | a contract with the Department nor may the public member's firm | 18 | | be considered for a contract with the Department while he or | 19 | | she is serving as a public member of the committee. Terms of | 20 | | service for public members shall not exceed 5 years. No public | 21 | | member of the loan selection committee shall hold consecutive | 22 | | terms, nor shall any member receive any compensation other than | 23 | | for reasonable expenses for service related to this committee. | 24 | | The Department shall establish through administrative | 25 | | rules the requirements for eligibility and criteria for loan | 26 | | applications, approved use of funds, amount of loans, interest |
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| 1 | | rates, collateral, and terms. The Department is authorized to | 2 | | adopt rules to implement this Section. | 3 | | The Department shall notify the prime contractor on a | 4 | | project that a subcontractor on the same project has been | 5 | | awarded a loan from the Working Capital Revolving Loan Fund. If | 6 | | the loan agreement is amended by the parties of the loan | 7 | | agreement, the prime contractor shall not be a party to any | 8 | | disadvantaged business enterprise loan agreement between the | 9 | | Department and participating subcontractor and shall not incur | 10 | | any liability for loan debt accrued as a result of the loan | 11 | | agreement. | 12 | | (d) Loan funds shall be disbursed to the escrow account, | 13 | | subject to appropriation, from the Working Capital Revolving | 14 | | Loan Fund established as a special fund in the State treasury. | 15 | | Loaned funds that are repaid to the Department shall be | 16 | | deposited into the Working Capital Revolving Loan Fund. Other | 17 | | appropriations, grants, awards, and donations to the | 18 | | Department for the purpose of the revolving loan program | 19 | | established by this Section shall be deposited into the Working | 20 | | Capital Revolving Loan Fund. | 21 | | (e) A funds control process shall be established to serve | 22 | | as an intermediary between the Department and the contractor to | 23 | | verify payments and to ensure paperwork is properly filed. The | 24 | | Fund Control Agent and contractor shall enter into an agreement | 25 | | regarding the control and disbursement of all payments to be | 26 | | made by the Fund Control Agent under the contract. The |
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| 1 | | Department shall authorize and direct the Fund Control Agent to | 2 | | review all disbursement requests and supporting documents | 3 | | received from the contractor. The Fund Control Agent shall | 4 | | direct the escrow account to disburse escrow funds to the | 5 | | subcontractor, material supplier, and other appropriate | 6 | | entities by written request for the disbursement. The | 7 | | disadvantaged business enterprise shall maintain control over | 8 | | its business operations by directing the payments of the loan | 9 | | funds through its relationship with the Funds Control Agent. | 10 | | The funds control process shall require the Fund Control Agent | 11 | | to intercept payments made from a contractor to a subcontractor | 12 | | receiving a loan made under this Act and allow the Fund Control | 13 | | Agent to deduct any unpaid loan repayments owed to the State | 14 | | before releasing the payment to the subcontractor. | 15 | | (f) Loan assistance funds shall be allowed for current | 16 | | liabilities or working capital expenses associated with | 17 | | participation in the performance of contracts procured and | 18 | | awarded by the Department for transportation construction and | 19 | | construction-related purposes. Loan funds shall not be used | 20 | | for: | 21 | | (1) refinancing or payment of existing long-term debt; | 22 | | (2) payment of non-current taxes; | 23 | | (3) payments, advances, or loans to stockholders, | 24 | | officers, directors, partners, or member owners of limited | 25 | | liability companies; or | 26 | | (4) the purchase or lease of non-construction motor |
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| 1 | | vehicles or equipment. | 2 | | The loan agreement shall provide for the terms and | 3 | | conditions of repayment which shall not extend repayment longer | 4 | | than final payment made by the Department following completion | 5 | | and acceptance of the work authorized for loan assistance under | 6 | | the program. The funds shall be loaned with interest. | 7 | | (g) The number of loans one disadvantaged business | 8 | | enterprise may receive under this program is limited to 3. | 9 | | Loans shall not be granted simultaneously. An applicant shall | 10 | | not be permitted to obtain a loan under this program for a | 11 | | different and additional project until payment in full of any | 12 | | outstanding loans granted under this program have been received | 13 | | by the Department. | 14 | | (h) The rate of interest for any loan shall be set by rule. | 15 | | (i) The loan amount to any successful applicant shall not | 16 | | exceed 55% percent of the contract or subcontract supporting | 17 | | the loan. | 18 | | (j) Nothing in this Section shall impair the contractual | 19 | | rights of the Department and the prime contractor or the | 20 | | contractual rights between a prime contractor and | 21 | | subcontractor. | 22 | | (k) Nothing in this Section is intended nor shall be | 23 | | construed to vest applicants denied funds by the Department in | 24 | | accordance with this Section a right to challenge, protest, or | 25 | | contest the awarding of funds by the Department to successful | 26 | | applicants or any loan or agreement executed in connection with |
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| 1 | | it. | 2 | | (l) The debt delinquency prohibition under Section 50-11 of | 3 | | the Illinois Procurement Code applies to any future contracts | 4 | | or subcontracts in the event of a loan default. | 5 | | (m) Investment income which is attributable to the | 6 | | investment of moneys in the Working Capital Revolving Loan Fund | 7 | | shall be retained in the Working Capital Revolving Loan Fund. | 8 | | (n) By January 1, 2014 and January 1 of each succeeding | 9 | | year, the Department shall report to the Governor and the | 10 | | General Assembly on the utilization and status of the revolving | 11 | | loan program. The report shall, at a minimum, include the | 12 | | amount transferred from the Road Fund to the Working Capital | 13 | | Revolving Loan Fund, the number and size of approved loans, the | 14 | | amounts disbursed to and from the escrow account, the amounts, | 15 | | if any, repaid to the Working Capital Revolving Loan Fund, the | 16 | | interest and fees paid by loan recipients, and the interest | 17 | | earned on balances in the Working Capital Revolving Loan Fund, | 18 | | and the names of any contractors who are delinquent or in | 19 | | default of payment. The January 1, 2017 report shall include an | 20 | | evaluation of the program by the Department to determine the | 21 | | program's viability and progress towards its stated purpose. | 22 | | (o) The Department's authority to execute additional loans | 23 | | or request transfers to the Working Capital Revolving Loan Fund | 24 | | expires on June 1, 2018. The Comptroller shall order | 25 | | transferred and the Treasurer shall transfer any available | 26 | | balance remaining in the Working Capital Revolving Loan Fund to |
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| 1 | | the Road Fund on January 1, 2019, or as soon thereafter as may | 2 | | be practical. Any loan repayments, interest, or fees that are | 3 | | by the terms of a loan agreement payable to the Working Capital | 4 | | Revolving Loan Fund after June 20, 2018 shall instead be paid | 5 | | into the Road Fund as the successor fund to the Working Capital | 6 | | Revolving Loan Fund.
| 7 | | (Source: P.A. 98-117, eff. 7-30-13.)
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