|Public Act 098-0117|
|HB3267 Enrolled||LRB098 11170 MLW 41876 b|
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
The Department of Transportation Law of the
Civil Administrative Code of Illinois is amended by adding
Section 2705-610 as follows:
(20 ILCS 2705/2705-610 new)
Disadvantaged business revolving loan and
(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.
"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
"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
"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
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
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
(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
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
(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
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
(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
(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
(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
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.
The State Finance Act is amended by adding
Sections 5.826 and 8r as follows:
(30 ILCS 105/5.826 new)
The Working Capital Revolving Loan Fund.
(30 ILCS 105/8r new)
Transfer to the Working Capital Revolving Loan
(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
(b) No transfer may be requested or ordered if the
available balance in the Working Capital Revolving Loan Fund is