State of Illinois
92nd General Assembly

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[ Introduced ][ Engrossed ][ Senate Amendment 001 ]


HB4157 Enrolled                                LRB9215282REpk

 1        AN  ACT  concerning   community   development   financial
 2    institutions.

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

 5        Section 1.  Short title.  This Act may be  cited  as  the
 6    Illinois Investment and Development Authority Act.

 7        Section  5.   Purpose.   The  purpose  of  this Act is to
 8    create a State entity to support the creation and  growth  of
 9    community  development  financial institutions, which provide
10    access  to  capital   for   business   development,   capital
11    investments,  and  other  financing  to expand private sector
12    activities in economically disadvantaged communities and  for
13    low  income people, by providing grants, loans, and technical
14    assistance to CDFIs.  Assistance by  this  entity  would  (i)
15    expand  financial services and capital access in economically
16    disadvantaged  communities,  (ii)  provide  support  for  the
17    creation of new small businesses and new jobs in economically
18    disadvantaged communities,  (iii)  create  opportunities  for
19    banks  to  get a federal incentive for investments in a CDFI,
20    (iv) increase this State's share  of  the  money  distributed
21    annually  by  the  federal  Community  Development  Financial
22    Institutions  Fund,  and (v) create a new partnership between
23    the State, banks and thrifts, and CDFIs.

24        Section 10.  Definitions.  In this Act:
25        "Authority" means the Illinois Investment and Development
26    Authority.
27        "Community development financial institution"  or  "CDFI"
28    means an Illinois community development financial institution
29    certified   in   accordance   with   the   federal  Community
30    Development Banking and Financial Institutions  Act  of  1994
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 1    (Public  Law  103-325)  and accredited by the Authority under
 2    Section 50 of this Act.

 3        Section  15.   Creation  of   Illinois   Investment   and
 4    Development Authority; members.
 5        (a)  There  is  created  a  political  subdivision,  body
 6    politic and corporate, to be known as the Illinois Investment
 7    and  Development Authority.  The exercise by the Authority of
 8    the powers conferred by law  shall  be  an  essential  public
 9    function.   The  governing  powers  of the Authority shall be
10    vested in a body consisting of 11 members, including,  as  ex
11    officio  members,  the  Commissioner of Banks and Real Estate
12    and the Director of Commerce and Community Affairs  or  their
13    designees.   The  other  9  members of the Authority shall be
14    appointed by the Governor, with the advice and consent of the
15    Senate, and shall be designated "public members".  The public
16    members shall include representatives from  banks  and  other
17    private  financial services industries, community development
18    finance experts,  small  business  development  experts,  and
19    other  community  leaders.   Not  more  than 6 members of the
20    Authority  may  be  of  the  same   political   party.    The
21    Chairperson  of  the  Authority  shall  be  designated by the
22    Governor from among its public members.
23        (b)  Six members of  the  Authority  shall  constitute  a
24    quorum. However, when a quorum of members of the Authority is
25    physically  present  at  the  meeting  site,  other Authority
26    members may participate in and act at any meeting through the
27    use  of  a  conference  telephone  or  other   communications
28    equipment  by means of which all persons participating in the
29    meeting can hear each other.  Participation in  such  meeting
30    shall  constitute  attendance  and  presence in person at the
31    meeting of the person  or  persons  so  participating.    All
32    official  acts of the Authority shall require the approval of
33    at least 5 members.
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 1        (c)  Of the members initially appointed by  the  Governor
 2    pursuant to this Act, 3 shall serve until the third Monday in
 3    January,  2004,  3  shall  serve  until  the  third Monday in
 4    January, 2005, and 3 shall serve until the  third  Monday  in
 5    January,  2006 and all shall serve until their successors are
 6    appointed and qualified.  All successors  shall  hold  office
 7    for  a  term  of  3  years  commencing on the third Monday in
 8    January of the year in which their term commences, except  in
 9    case  of  an  appointment  to  fill  a  vacancy.  Each member
10    appointed under this Section who is confirmed by  the  Senate
11    shall  hold office during the specified term and until his or
12    her successor is appointed and qualified.  In case of vacancy
13    in the office when the Senate is not in session, the Governor
14    may make a temporary appointment until the  next  meeting  of
15    the  Senate,  when the Governor shall nominate such person to
16    fill the office, and any person so nominated who is confirmed
17    by the Senate, shall  hold  his  or  her  office  during  the
18    remainder  of  the  term  and  until  his or her successor is
19    appointed and qualified.
20        (d)  Members of the Authority shall not  be  entitled  to
21    compensation  for  their  services  as  members, but shall be
22    entitled to reimbursement for all necessary expenses incurred
23    in  connection  with  the  performance  of  their  duties  as
24    members.
25        (e)  The Governor may remove any  public  member  of  the
26    Authority  in  case  of  incompetency,  neglect  of  duty, or
27    malfeasance in office, after service on the member of a  copy
28    of  the written charges against him or her and an opportunity
29    to be publicly heard in person or by counsel in  his  or  her
30    own defense upon not less than 10 days notice.

31        Section  20.   Executive  Director; other employees.  The
32    members of the Authority shall appoint an Executive  Director
33    to hold office at the pleasure of the members.  The Executive
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 1    Director  shall  be  the chief administrative and operational
 2    officer of the Authority,  shall  direct  and  supervise  its
 3    administrative  affairs  and  general  management and perform
 4    such other duties as may be prescribed from time to  time  by
 5    the  members,  and  shall  receive  compensation fixed by the
 6    Authority.  The Executive Director or any  committee  of  the
 7    members may carry out such responsibilities of the members as
 8    the  members  by  resolution  may  delegate.   The  Executive
 9    Director shall attend all meetings of the Authority; however,
10    no action of the Authority shall be invalid on account of the
11    absence  of  the  Executive  Director  from  a  meeting.  The
12    Authority  may  engage  the services of such other agents and
13    employees, including legal and technical  experts  and  other
14    consultants, as it may deem advisable and may prescribe these
15    persons' duties and fix their compensation.

16        Section 25.  Powers of Authority.
17        (a)  The  Authority  possesses  all  the powers as a body
18    corporate necessary and convenient to accomplish the purposes
19    of this Act, including, without any intended limitation  upon
20    the general powers hereby conferred, all of the following:
21             (1)  To  enter into loans, contracts, and agreements
22        in  any  matter  connected  with  any  of  its  corporate
23        purposes and to invest its funds.
24             (2)  To sue and be sued.
25             (3)  To  employ   those   agents,   employees,   and
26        independent   contractors  necessary  to  carry  out  its
27        purposes, and to fix their compensation, their  benefits,
28        and the terms and conditions of their employment.
29             (4)  To  have and use a common seal and to alter the
30        seal at pleasure.
31             (5)  To adopt all needful resolutions, by-laws,  and
32        rules for the conduct of its business and affairs.
33             (6)  To  have and exercise all powers and be subject
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 1        to all duties usually incident to boards of directors  of
 2        corporations.
 3        (b)  The Authority shall not have the power to levy taxes
 4    for any purpose whatsoever.

 5        Section  30.   Office.   The  Authority  may  maintain an
 6    office or branch  office  anywhere  in  this  State  and  may
 7    utilize,  without  the payment of rent, any office facilities
 8    that  the  State  may  conveniently  make  available  to  the
 9    Authority.

10        Section 35.  Secretary; treasurer; funds.
11        (a)  The  Authority  shall  appoint   a   secretary   and
12    treasurer,  who  may be a member or members of the Authority,
13    to hold office at the  pleasure  of  the  Authority.   Before
14    entering  upon  the  duties  of  the  respective offices, the
15    person  or  persons  shall  take   and   subscribe   to   the
16    constitutional  oath  of  office,  and  the  treasurer  shall
17    execute  a bond with corporate sureties to be approved by the
18    Authority. The bond shall be  payable  to  the  Authority  in
19    whatever   penal  sum  may  be  directed  by  the  Authority,
20    conditioned upon the faithful performance of  the  duties  of
21    the  office  and  the payment of all money received by him or
22    her according to law and the orders of  the  Authority.   The
23    Authority  may,  at  any  time,  require  a new bond from the
24    treasurer in such penal sum as may then be determined by  the
25    Authority.   The  obligation of the sureties shall not extend
26    to any loss sustained by the insolvency, failure, or  closing
27    of any savings and loan association or national or state bank
28    wherein  the  treasurer  has  deposited  funds if the bank or
29    savings  and  loan  association  has  been  approved  by  the
30    Authority as a depository for  these  funds.   The  oaths  of
31    office  and  the  treasurer's  bond  shall  be  filed  in the
32    principal office of the Authority.
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 1        (b)  All  funds  of  the  Authority,  including   without
 2    limitation  (i)  grants or loans from the federal government,
 3    the State, or any agency or instrumentality of the  State  or
 4    federal  government, (ii) fees, service charges, interest, or
 5    other investment earnings on its  funds,  (iii)  payments  of
 6    principal  of  and  interest  on loans of its funds, and (iv)
 7    revenue from any other source, except funds  the  application
 8    of   which   is   otherwise   specifically  provided  for  by
 9    appropriation, resolution, grant agreement, lease  agreement,
10    loan  agreement,  indenture,  mortgage,  trust  agreement, or
11    other agreement, may be held by the Authority in its treasury
12    and be generally available for expenditure by  the  Authority
13    for any of the purposes authorized by this Act.
14        (c)  In  addition  to investments authorized by Section 2
15    of the Public Funds Investment Act, funds  of  the  Authority
16    may  be invested in (i) obligations issued by any state, unit
17    of local government, or school  district,  which  obligations
18    are  rated  at  the  time  of  purchase  by a national rating
19    service within the 2 highest rating  classifications  without
20    regard  to any rating refinement or gradation by numerical or
21    other modifier, or (ii) equity securities  of  an  investment
22    company  registered  under the federal Investment Company Act
23    of  1940  whose  sole  assets,  other  than  cash  and  other
24    temporary investments,  are  obligations  that  are  eligible
25    investments  for  the  Authority, provided that not more than
26    20% of the assets of the investment company  may  consist  of
27    unrated  obligations  of  the type described in clause (i) of
28    this subsection (c)  that  the  board  of  directors  of  the
29    investment company has determined to be of comparable quality
30    to   rated  obligations  described  in  clause  (i)  of  this
31    subsection (c).
32        (d)  Moneys appropriated by the General Assembly  to  the
33    Authority  shall be held in the State treasury unless the Act
34    making the appropriation specifically states that the  moneys
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 1    are  appropriated to the Authority's treasury.  Such funds as
 2    are authorized  to  be  held  in  the  Authority's  treasury,
 3    deposited  in  any  bank or savings and loan association, and
 4    placed in the name of the Authority  shall  be  withdrawn  or
 5    paid  out only by check or draft upon the bank or savings and
 6    loan association, signed by the treasurer  and  countersigned
 7    by  the  Chairperson  of  the  Authority.   The Authority may
 8    designate any of its members or any officer  or  employee  of
 9    the  Authority  to affix the signature of the Chairperson and
10    may designate another to affix the signature of the treasurer
11    to any check or draft for payment of salaries  or  wages  and
12    for payment of any other obligations of not more than $2,500.
13    In  case any person whose signature appears upon any check or
14    draft, issued pursuant to this Act, ceases to hold his or her
15    office before the delivery of  the  check  or  draft  to  the
16    payee,   the   signature  nevertheless  shall  be  valid  and
17    sufficient for all purposes with the same effect  as  if  the
18    person  had remained in office until delivery of the check or
19    draft.  A bank  or  savings  and  loan  association  may  not
20    receive  public  funds as permitted by this Section unless it
21    has complied with the requirements  established  pursuant  to
22    Section 6 of the Public Funds Investment Act.

23        Section 40.  Conflict of interest.
24        (a)  No  member,  officer,  agent,  or  employee  of  the
25    Authority  shall,  in his or her own name or in the name of a
26    nominee, be an officer  or  director  or  hold  an  ownership
27    interest of more than 7.5% in any person, association, trust,
28    corporation, partnership, or other entity that is, in its own
29    name  or  in  the name of a nominee, a party to a contract or
30    agreement upon which the member, officer, agent, or  employee
31    may  be  called upon to act or vote.  The prohibition of this
32    subsection (a) does not apply, however, to prohibit contracts
33    or agreements between the Authority  and  entities  qualified
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 1    under Section 501 of the Internal Revenue Code of 1986 due to
 2    a  member  of the Authority serving as an officer or director
 3    of that entity.
 4        (b)  With respect to any  direct  or  indirect  interest,
 5    other  than  an interest prohibited in subsection (a) of this
 6    Section, in a contract or agreement upon  which  the  member,
 7    officer,  agent,  or  employee  may  be called upon to act or
 8    vote, a member, officer, agent, or employee of the  Authority
 9    shall disclose the interest to the secretary of the Authority
10    before the taking of final action by the Authority concerning
11    the  contract  or  agreement and shall so disclose the nature
12    and extent of the interest and his or her acquisition of  it,
13    and  those  disclosures shall be publicly acknowledged by the
14    Authority and entered upon the minutes of the Authority.   If
15    a  member, officer, agent, or employee of the Authority holds
16    such an interest, then he or she shall refrain (i)  from  any
17    further  official  involvement  in  regard to the contract or
18    agreement, (ii) from voting on any matter pertaining  to  the
19    contract  or  agreement,  and  (iii)  from communicating with
20    members  of  the  Authority  or  its  officers,  agents,  and
21    employees   concerning    the    contract    or    agreement.
22    Notwithstanding  any  other provision of law, any contract or
23    agreement entered into in conformity with this subsection (b)
24    shall not be void  or  invalid  by  reason  of  the  interest
25    described  in  this  subsection  (b), nor shall any person so
26    disclosing the interest and refraining from further  official
27    involvement  as  provided in this subsection (b) be guilty of
28    an offense, be removed from office,  or  be  subject  to  any
29    other penalty on account of that interest.
30        (c)  Any  contract  or  agreement  made  in  violation of
31    subsection (a) or (b) of this Section shall be null and void,
32    but shall not give rise to any action against the Authority.

33        Section 45.  Audit; fiscal year;  report.   The  accounts
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 1    and   books   of   the  Authority,  including  its  receipts,
 2    disbursements, contracts, and other matters relating  to  its
 3    finances,  operation,  and  affairs  shall  be  examined  and
 4    audited  at least once within each 2-year period by a firm of
 5    certified public accountants, who shall certify its audit  to
 6    the  State  Comptroller.  The  fiscal  year for the Authority
 7    shall commence on July 1.  As soon  after  the  end  of  each
 8    fiscal year as may be expedient, the Authority shall cause to
 9    be  prepared  and  printed  a  complete  report and financial
10    statement  of  its  operations  and   of   its   assets   and
11    liabilities.   A  reasonably  sufficient  number of copies of
12    this report shall be  printed  for  distribution  to  persons
13    interested,  upon  request, and a copy of the report shall be
14    filed with the Governor, the Secretary of  State,  the  State
15    Comptroller,  the  Secretary  of the Senate, and the Clerk of
16    the House of Representatives.

17        Section 50.  Accreditation.
18        (a)  A CDFI must be accredited by the Authority in  order
19    to  receive  assistance  from the Authority, unless otherwise
20    specified in this Act. The Authority may revoke accreditation
21    from  a  CDFI  that   no   longer   meets   the   Authority's
22    accreditation  criteria.   Accreditation of a CDFI under this
23    Act  does  not,  in  and  of  itself,  qualify  the  CDFI  to
24    participate  in  a  financing  program  administered  by  the
25    Authority.
26        (b)  Authority criteria for  accreditation  must  include
27    certification under the federal Community Development Banking
28    and  Financial  Institutions Act of 1994 (Public Law 103-325)
29    and any other criteria that the Authority deems appropriate.
30        (c)  The Authority shall accredit CDFIs in  a  manner  to
31    ensure  the  use  of  CDFIs in all geographic regions of this
32    State to the greatest extent possible.
HB4157 Enrolled             -10-               LRB9215282REpk
 1        Section 55.  Authority's responsibilities.
 2        (a)  The Authority shall make grants and  low-rate  loans
 3    to  CDFIs  so that CDFIs may fill a credit gap by engaging in
 4    below market rate  financing  in  economically  disadvantaged
 5    communities  and to low income people.  As part of a grant or
 6    loan agreement, a CDFI may  request  and  the  Authority  may
 7    consent to having the grant or loan proceeds paid directly to
 8    a  CDFI's  creditor.   As  part  of  a  loan  agreement,  the
 9    Authority  may  require  additional  security  from the CDFI,
10    including without limitation a pledge of a certain percentage
11    of the CDFI's assets or future earnings.
12        (b)  The Authority shall provide technical assistance  to
13    CDFIs  to  (i)  expand the financial services the CDFI sector
14    offers, such as micro-business lending, facilities financing,
15    low income housing financing, and personal financial services
16    for low income persons, (ii) encourage the  establishment  of
17    downstate  CDFIs,  and (iii) provide technical assistance and
18    training to CDFIs' borrowers.

19        Section 60.  Authority grants.  The Authority  may  issue
20    grants  to  CDFIs  or  to  nonprofit  organizations  that are
21    attempting  to  obtain  federal  certification  or  Authority
22    accreditation as a CDFI.   The  Authority  may  issue,  in  a
23    manner  consistent  with subsection (c) of Section 50 of this
24    Act, grants for the purpose of developing  or  enhancing  the
25    ability   of   the  CDFI  or  nonprofit  organization  to  be
26    accredited as a CDFI under Section 50  of  this  Act  and  to
27    receive  loans  from  the  Authority under Section 65 of this
28    Act.  The  Authority  may  also  issue  grants  or  loans  to
29    nonprofit  organizations  that  have  entered  into a written
30    contract with a CDFI or a  nonprofit  organization  receiving
31    grants  from the Authority to obtain federal certification or
32    Authority accreditation as a CDFI.
33        In areas of this  State  where  no  CDFI  exists  and  no
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 1    nonprofit  organization is working to obtain certification or
 2    accreditation as a CDFI, the Authority may issue grants to  a
 3    nonprofit   organization   deemed  by  the  Authority  to  be
 4    performing  activities  consistent  with  the  goals  of  the
 5    federal   Community   Development   Banking   and   Financial
 6    Institutions Act of 1994 (Public Law  103-325).   The  grants
 7    shall  be  used  by  the  nonprofit  organization  to provide
 8    technical assistance, training, or  other  support  to  small
 9    businesses    or    other   for-profit   or    not-for-profit
10    organizations.

11        Section 65.  Authority loans.   The  Authority  may  make
12    loans to CDFIs, from moneys appropriated for this purpose, on
13    such  terms  and  conditions  as the Authority may determine.
14    Loans shall be made and used in a manner consistent with  the
15    requirements of the federal Community Development Banking and
16    Financial  Institutions  Act  of  1994  (Public Law 103-325).
17    Loans to CDFIs may be made  by  the  Authority  as  the  sole
18    lender   or   in  cooperation  with  participating  investors
19    pursuant to agreements entered into in accordance  with  this
20    Act.   Loan repayments shall be used by the Authority to make
21    new loans to CDFIs.

22        Section 70.  Community development loans.
23        (a)  CDFIs that receive loans from  the  Authority  under
24    Section   65  of  this  Act  shall  make  and  use  community
25    development loans pursuant to guidelines established  by  the
26    Authority  and  in  a  manner  consistent  with  the  federal
27    Community  Development Banking and Financial Institutions Act
28    of 1994 (Public Law 103-325).  The guidelines  shall  include
29    criteria  for  the approval of a portfolio of loans submitted
30    by CDFIs.
31        (b)  In connection with community development loans under
32    this  Section,  the  recipient  of  a   loan   must   provide
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 1    certification  to  the  Authority that the recipient does not
 2    have any outstanding debts in the  form  of  delinquent  real
 3    estate  taxes  or  utility  bills that are more than one year
 4    outstanding.

 5        Section 75.  Report to General Assembly.  Within 90  days
 6    after  the  end  of  each  fiscal  year,  the Authority shall
 7    prepare a report for that fiscal year and file  it  with  the
 8    General  Assembly  as  provided in Section 3.1 of the General
 9    Assembly Organization Act.   The  report  shall  include  the
10    amount  of  funds  appropriated  to  the  Authority that were
11    deposited by the Authority in special accounts  in  banks  or
12    trust  companies,  the  amount of disbursements made from the
13    special accounts, the number, name,  and  location  of  CDFIs
14    accredited  by  the  Authority,  and the number and amount of
15    grants to CDFIs or nonprofit organizations.

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