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Public Act 098-0117
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| HB3267 Enrolled | LRB098 11170 MLW 41876 b |
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AN ACT concerning State government.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Department of Transportation Law of the
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Civil Administrative Code of Illinois is amended by adding |
Section 2705-610 as follows:
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(20 ILCS 2705/2705-610 new) |
Sec. 2705-610. Disadvantaged business revolving loan and |
grant program. |
(a) Purpose. The purpose of this Section is to provide for |
assistance to disadvantaged business enterprises with project |
financing costs for those firms that are ready, willing, and |
able to participate on Department construction contracts. The |
Department's disparity study recommends and supports a |
financing program to address this barrier faced by |
disadvantaged business enterprises. |
(b) For the purposes of this Section: |
"Construction" means building, altering, repairing, |
improving, or demolishing any public structure or building, or |
making improvements of any kind to public real property. |
Construction does not include the routine operation, routine |
repair, or routine maintenance of existing structures, |
buildings, or real property. |
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"Construction-related services" means those services |
including construction design, layout, inspection, support, |
feasibility or location study, research, development, |
planning, or other investigative study undertaken by a |
construction agency concerning construction or potential |
construction. |
"Contractor" means one who participates, through a |
contract or subcontract at any tier, in a United States |
Department of Transportation-assisted or Illinois Department |
of Transportation-assisted highway, rail, transit, or airport |
program. |
"Escrow account" means a fiduciary account established |
with (1) a banking corporation which is both organized under |
the Illinois Banking Act and authorized to accept and |
administer trusts in this State; or (2) a national banking |
association which has its principal place of business in this |
State and which is authorized to accept and administer trusts |
in this State. |
"Fund Control Agent" means a person who provides managerial |
and technical assistance to disadvantaged business enterprises |
and holds the authority to manage a loan under this Section. |
The Fund Control Agent will be procured by the Department under |
a request for proposal process governed by the Illinois |
Procurement Code and rules adopted under that Code. |
"Loan" or "loan assistance funds" means a low-interest line |
of credit made available to a selected disadvantaged business |
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enterprise under this program for the purposes set forth in |
subsection (f) below. |
(c) The Department may enter into agreements to make loans |
to disadvantaged business enterprises certified by the |
Department for participation on Department-procured |
construction and construction-related contracts. For purposes |
of this Section, the term "disadvantaged business enterprise" |
has the meaning ascribed to it by 49 CFR Part 26. |
The Department shall establish a loan selection committee |
to review applications and select eligible disadvantaged |
business enterprises for low-interest loans under this |
program. A selection committee shall be comprised of at least 3 |
members appointed by the Secretary of the Department and shall |
include at least one public member from the construction or |
financing industry. The public member may not be employed or |
associated with any disadvantaged business enterprise holding |
a contract with the Department nor may the public member's firm |
be considered for a contract with the Department while he or |
she is serving as a public member of the committee. Terms of |
service for public members shall not exceed 5 years. No public |
member of the loan selection committee shall hold consecutive |
terms, nor shall any member receive any compensation other than |
for reasonable expenses for service related to this committee. |
The Department shall establish through administrative |
rules the requirements for eligibility and criteria for loan |
applications, approved use of funds, amount of loans, interest |
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rates, collateral, and terms. The Department is authorized to |
adopt rules to implement this Section. |
The Department shall notify the prime contractor on a |
project that a subcontractor on the same project has been |
awarded a loan from the Working Capital Revolving Loan Fund. If |
the loan agreement is amended by the parties of the loan |
agreement, the prime contractor shall not be a party to any |
disadvantaged business enterprise loan agreement between the |
Department and participating subcontractor and shall not incur |
any liability for loan debt accrued as a result of the loan |
agreement. |
(d) Loan funds shall be disbursed to the escrow account, |
subject to appropriation, from the Working Capital Revolving |
Loan Fund established as a special fund in the State treasury. |
Loaned funds that are repaid to the Department shall be |
deposited into the Working Capital Revolving Loan Fund. Other |
appropriations, grants, awards, and donations to the |
Department for the purpose of the revolving loan program |
established by this Section shall be deposited into the Working |
Capital Revolving Loan Fund. |
(e) A funds control process shall be established to serve |
as an intermediary between the Department and the contractor to |
verify payments and to ensure paperwork is properly filed. The |
Fund Control Agent and contractor shall enter into an agreement |
regarding the control and disbursement of all payments to be |
made by the Fund Control Agent under the contract. The |
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Department shall authorize and direct the Fund Control Agent to |
review all disbursement requests and supporting documents |
received from the contractor. The Fund Control Agent shall |
direct the escrow account to disburse escrow funds to the |
subcontractor, material supplier, and other appropriate |
entities by written request for the disbursement. The |
disadvantaged business enterprise shall maintain control over |
its business operations by directing the payments of the loan |
funds through its relationship with the Funds Control Agent. |
The funds control process shall require the Fund Control Agent |
to intercept payments made from a contractor to a subcontractor |
receiving a loan made under this Act and allow the Fund Control |
Agent to deduct any unpaid loan repayments owed to the State |
before releasing the payment to the subcontractor. |
(f) Loan assistance funds shall be allowed for current |
liabilities or working capital expenses associated with |
participation in the performance of contracts procured and |
awarded by the Department for transportation construction and |
construction-related purposes. Loan funds shall not be used |
for: |
(1) refinancing or payment of existing long-term debt; |
(2) payment of non-current taxes; |
(3) payments, advances, or loans to stockholders, |
officers, directors, partners, or member owners of limited |
liability companies; or |
(4) the purchase or lease of non-construction motor |
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vehicles or equipment. |
The loan agreement shall provide for the terms and |
conditions of repayment which shall not extend repayment longer |
than final payment made by the Department following completion |
and acceptance of the work authorized for loan assistance under |
the program. The funds shall be loaned with interest. |
(g) The number of loans one disadvantaged business |
enterprise may receive under this program is limited to 3. |
Loans shall not be granted simultaneously. An applicant shall |
not be permitted to obtain a loan under this program for a |
different and additional project until payment in full of any |
outstanding loans granted under this program have been received |
by the Department. |
(h) The rate of interest for any loan shall be set by rule. |
(i) The loan amount to any successful applicant shall not |
exceed 55% percent of the contract or subcontract supporting |
the loan. |
(j) Nothing in this Section shall impair the contractual |
rights of the Department and the prime contractor or the |
contractual rights between a prime contractor and |
subcontractor. |
(k) Nothing in this Section is intended nor shall be |
construed to vest applicants denied funds by the Department in |
accordance with this Section a right to challenge, protest, or |
contest the awarding of funds by the Department to successful |
applicants or any loan or agreement executed in connection with |
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it. |
(l) The debt delinquency prohibition under Section 50-11 of |
the Illinois Procurement Code applies to any future contracts |
or subcontracts in the event of a loan default. |
(m) Investment income which is attributable to the |
investment of moneys in the Working Capital Revolving Loan Fund |
shall be retained in the Working Capital Revolving Loan Fund. |
(n) By January 1, 2014 and January 1 of each succeeding |
year, the Department shall report to the Governor and the |
General Assembly on the utilization and status of the revolving |
loan program. The report shall, at a minimum, include the |
amount transferred from the Road Fund to the Working Capital |
Revolving Loan Fund, the number and size of approved loans, the |
amounts disbursed to and from the escrow account, the amounts, |
if any, repaid to the Working Capital Revolving Loan Fund, the |
interest and fees paid by loan recipients, and the interest |
earned on balances in the Working Capital Revolving Loan Fund, |
and the names of any contractors who are delinquent or in |
default of payment. The January 1, 2017 report shall include an |
evaluation of the program by the Department to determine the |
program's viability and progress towards its stated purpose. |
(o) The Department's authority to execute additional loans |
or request transfers to the Working Capital Revolving Loan Fund |
expires on June 1, 2018. The Comptroller shall order |
transferred and the Treasurer shall transfer any available |
balance remaining in the Working Capital Revolving Loan Fund to |
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the Road Fund on January 1, 2019, or as soon thereafter as may |
be practical. Any loan repayments, interest, or fees that are |
by the terms of a loan agreement payable to the Working Capital |
Revolving Loan Fund after June 20, 2018 shall instead be paid |
into the Road Fund as the successor fund to the Working Capital |
Revolving Loan Fund.
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Section 10. The State Finance Act is amended by adding |
Sections 5.826 and 8r as follows:
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(30 ILCS 105/5.826 new) |
Sec. 5.826. The Working Capital Revolving Loan Fund.
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(30 ILCS 105/8r new) |
Sec. 8r. Transfer to the Working Capital Revolving Loan |
Fund. |
(a) Except as provided in subsection (b), upon the written |
request of the Secretary of Transportation, the State |
Comptroller shall order and the State Treasurer shall transfer |
amounts not to exceed $3,000,000 in aggregate during a fiscal |
year, for a period of 5 years, from the Road Fund to the |
Working Capital Revolving Loan Fund as requested by the |
Secretary of Transportation or as soon thereafter as may be |
practical. |
(b) No transfer may be requested or ordered if the |
available balance in the Working Capital Revolving Loan Fund is |