Bill Text: IL HB2698 | 2017-2018 | 100th General Assembly | Enrolled


Bill Title: Amends the Build Illinois Act. Provides that the Department of Commerce and Economic Opportunity may also make loans or equity investments to small businesses with moneys in the State Small Business Credit Initiative Fund (currently, the Department make only make such loans and equity investments with moneys in the Build Illinois Bond Fund, the Illinois Capital Revolving Fund, or the Illinois Equity Revolving Fund). Provides that the Department of Commerce and Economic Opportunity may make loans to small businesses of up to $2,000,000 (currently, $750,000) per project. Provides that moneys collected from the fees imposed under this Act connected with the Capital Fund shall be deposited into the Capital Fund. Provides that loans under the minority, veteran, female, and persons with a disability loan program shall not exceed $400,000 (currently, $100,000) without a waiver from the Director of Commerce and Economic Opportunity. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 15-5)

Status: (Enrolled) 2017-05-31 - Passed Both Houses [HB2698 Detail]

Download: Illinois-2017-HB2698-Enrolled.html



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1 AN ACT concerning finance.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Build Illinois Act is amended by changing
5Sections 9-3, 9-4, 9-4.2, and 9-4.3 and by adding Section 9-4.8
6as follows:
7 (30 ILCS 750/9-3) (from Ch. 127, par. 2709-3)
8 Sec. 9-3. Powers and duties. The Department has the power:
9 (a) To make loans or equity investments to small
10businesses, and to make loans or grants or investments to or
11through financial intermediaries. The loans and investments
12shall be made from appropriations from the Build Illinois Bond
13Fund, Illinois Capital Revolving Loan Fund, State Small
14Business Credit Initiative Fund, or Illinois Equity Revolving
15Fund for the purpose of promoting the creation or retention of
16jobs within small businesses or to modernize or maintain
17competitiveness of firms in Illinois. The grants shall be made
18from appropriations from the Build Illinois Bond Fund or
19Illinois Capital Revolving Loan Fund for the purpose of
20technical assistance.
21 (b) To make loans to or investments in businesses that have
22received federal Phase I Small Business Innovation Research
23grants as a bridge while awaiting federal Phase II Small

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1Business Innovation Research grant funds.
2 (c) To enter into interagency agreements, accept funds or
3grants, and engage in cooperation with agencies of the federal
4government, local units of government, universities, research
5foundations, political subdivisions of the State, financial
6intermediaries, and regional economic development corporations
7or organizations for the purposes of carrying out this Article.
8 (d) To enter into contracts, financial intermediary
9agreements, or any other agreements or contracts with financial
10intermediaries necessary or desirable to further the purposes
11of this Article. Any such agreement or contract may include,
12without limitation, terms and provisions including, but not
13limited to loan documentation, review and approval procedures,
14organization and servicing rights, and default conditions.
15 (e) To fix, determine, charge and collect any premiums,
16fees, charges, costs and expenses, including without
17limitation, any application fees, commitment fees, program
18fees, financing charges, collection fees, training fees, or
19publication fees in connection with its activities under this
20Article and to accept from any source any gifts, donations, or
21contributions of money, property, labor, or other things of
22value to be held, used, and applied to carry out the purposes
23of this Article. All fees, charges, collections, gifts,
24donations, or other contributions shall be deposited into the
25Illinois Capital Revolving Loan Fund, or the State Small
26Business Credit Initiative Fund.

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1 (f) To establish application, notification, contract, and
2other forms, procedures, rules or regulations deemed necessary
3and appropriate.
4 (g) To consent, subject to the provisions of any contract
5with another person, whenever it deems it necessary or
6desirable in the fulfillment of the purposes of this Article,
7to the modification or restructuring of any financial
8intermediary agreement, loan agreement or any equity
9investment agreement to which the Department is a party.
10 (h) To take whatever actions are necessary or appropriate
11to protect the State's interest in the event of bankruptcy,
12default, foreclosure, or noncompliance with the terms and
13conditions of financial assistance or participation provided
14hereunder or to otherwise protect or affect the State's
15interest, including the power to sell, dispose, lease or rent,
16upon terms and conditions determined by the Director to be
17appropriate, real or personal property which the Department may
18receive as a result thereof.
19 (i) To deposit any "Qualified Securities" which have been
20received by the Department as the result of any financial
21intermediary agreement, loan, or equity investment agreement
22executed in the carrying out of this Act, with the Office of
23the State Treasurer and held by that office until agreement to
24transfer such qualified security shall be certified by the
25Director of Commerce and Economic Opportunity.
26 (j) To assist small businesses that seek to apply for

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1public or private capital in preparing the application and to
2supply them with grant information, plans, reports,
3assistance, or advice on development finance and to assist
4financial intermediaries and participating lenders to build
5capacity to make debt or equity investments through
6conferences, workshops, seminars, publications, or any other
7media.
8 (k) To provide for staff, administration, and related
9support required to manage the programs authorized under this
10Article and pay for staffing and administration from the
11Illinois Capital Revolving Loan Fund, or the State Small
12Business Credit Initiative Fund, as appropriated by the General
13Assembly. Administration responsibilities may include, but are
14not limited to, research and identification of credit
15disadvantaged groups; design of comprehensive statewide
16capital access plans and programs addressing capital gap and
17capital marketplace structure and information barriers;
18direction, management, and control of specific projects; and
19communicate and cooperation with public development finance
20organizations and private debt and equity sources.
21 (l) To exercise such other powers as are necessary or
22incidental to the foregoing.
23(Source: P.A. 94-91, eff. 7-1-05.)
24 (30 ILCS 750/9-4) (from Ch. 127, par. 2709-4)
25 Sec. 9-4. Intermediary agreements and loans. Any loan made

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1pursuant to this Article shall:
2 (a) Be made only if a participating lender or other
3investor also provides a portion of the financing with respect
4to the project. The participating lender's or other investor's
5risk assumption may be in the form of a loan, letter of credit,
6guarantee, loan participation, bond purchase, or any other form
7approved by the Department;
8 (b) Finance no more than the lesser of 25% of the total
9amount of any single project, or $2,000,000 $750,000 for any
10single project, unless such limitations are waived by the
11Director, upon a finding that such waiver is appropriate to
12accomplish the purposes of this Article;
13 (c) Be made only if the Department determines, on the basis
14of all information available to it, that the project would not
15be undertaken unless the loan is provided;
16 (d) Be protected by security which may include, as
17available, first or second mortgage positions on real or
18personal property, royalty payments on sales of products or
19services, or any other security satisfactory to the Department
20to secure payment of the loan agreement. Personal notes or
21guarantees may be required from persons owning more than 20
22percent of the small business;
23 (e) Be in such amount and form and contain such terms and
24provisions with respect to property insurance, repairs,
25alterations, payment of taxes and assessments, delinquency
26charges, default remedies, additional security, and other

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1matters as the Department shall determine adequate to protect
2the public interest;
3 (f) Be made to a business approved by the Department as
4responsible and creditworthy;
5 (g) Be reviewed by the credit review committee established
6by the Department pursuant to this Article;
7 (h) Be made only after the Department has made a
8determination that the loan agreement will cause a project to
9be undertaken which has the potential to create or retain
10substantial employment or to modernize or improve the
11competitiveness of the firm in relation to the amount of the
12loan;
13 (i) Be made with businesses that have certified the project
14is a new plant start-up, modernization, or expansion or a new
15venture opportunity and is not relocation of an existing
16business from another site within the State unless that
17relocation results in substantial employment growth.
18(Source: P.A. 88-422.)
19 (30 ILCS 750/9-4.2) (from Ch. 127, par. 2709-4.2)
20 Sec. 9-4.2. Illinois Capital Revolving Loan Fund.
21 (a) There is hereby created the Illinois Capital Revolving
22Loan Fund, hereafter referred to in this Article as the
23"Capital Fund" to be held as a separate fund within the State
24Treasury.
25 The purpose of the Capital Fund is to finance intermediary

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1agreements, administration, technical assistance agreements,
2loans, grants, or investments in Illinois. In addition, funds
3may be used for a one time transfer in fiscal year 1994, not to
4exceed the amounts appropriated, to the Public Infrastructure
5Construction Loan Revolving Fund for grants and loans pursuant
6to the Public Infrastructure Loan and Grant Program Act.
7Investments, administration, grants, and financial aid shall
8be used for the purposes set for in this Article. Loan
9financing will be in the form of loan agreements pursuant to
10the terms and conditions set forth in this Article. All loans
11shall be conditioned on the project receiving financing from
12participating lenders or other investors. Loan proceeds shall
13be available for project costs, except for debt refinancing.
14 (b) There shall be deposited in the Capital Fund such
15amounts, including but not limited to:
16 (i) All receipts, including dividends, principal and
17 interest payments and royalties, from any applicable loan,
18 intermediary, or technical assistance agreement made from
19 the Capital Fund or from direct appropriations from the
20 Build Illinois Bond Fund or the Build Illinois Purposes
21 Fund (now abolished) or the General Revenue Fund by the
22 General Assembly entered into by the Department;
23 (ii) All proceeds of assets of whatever nature received
24 by the Department as a result of default or delinquency
25 with respect to loan agreements made from the Capital Fund
26 or from direct appropriations by the General Assembly,

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1 including proceeds from the sale, disposal, lease or rental
2 of real or personal property which the Department may
3 receive as a result thereof;
4 (iii) Any appropriations, grants or gifts made to the
5 Capital Fund;
6 (iv) Any income received from interest on investments
7 of moneys in the Capital Fund;
8 (v) All moneys resulting from the collection of
9 premiums, fees, charges, costs, and expenses in connection
10 with the Capital Fund as described in subsection (e) of
11 Section 9-3.
12 (c) The Treasurer may invest moneys in the Capital Fund in
13securities constituting obligations of the United States
14Government, or in obligations the principal of and interest on
15which are guaranteed by the United States Government, in
16obligations the principal of and interest on which are
17guaranteed by the United States Government, or in certificates
18of deposit of any State or national bank which are fully
19secured by obligations guaranteed as to principal and interest
20by the United States Government.
21(Source: P.A. 94-91, eff. 7-1-05; 94-392, eff. 8-1-05; 95-331,
22eff. 8-21-07.)
23 (30 ILCS 750/9-4.3) (from Ch. 127, par. 2709-4.3)
24 Sec. 9-4.3. Minority, veteran, female and disability
25loans.

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1 (a) In the making of loans for minority, veteran, female or
2disability small businesses, as defined below, the Department
3is authorized to employ different criteria in lieu of the
4general provisions of subsections (b), (d), (e), (f), (h), and
5(i) of Section 9-4.
6 Minority, veteran, female or disability small businesses,
7for the purpose of this Section, shall be defined as small
8businesses that are, in the Department's judgment, at least 51%
9owned and managed by one or more persons who are minority or
10female or who have a disability or who are veterans.
11 (b) Loans made pursuant to this Section:
12 (1) Shall not exceed $400,000 $100,000 or 50% of the
13 business project costs unless the Director of the
14 Department determines that a waiver of these limits is
15 required to meet the purposes of this Act.
16 (2) Shall only be made if, in the Department's
17 judgment, the number of jobs to be created or retained is
18 reasonable in relation to the loan funds requested.
19 (3) Shall be protected by security. Financial
20 assistance may be secured by first, second or subordinate
21 mortgage positions on real or personal property, by royalty
22 payments, by personal notes or guarantees, or by any other
23 security satisfactory to the Department to secure
24 repayment. Security valuation requirements, as determined
25 by the Department, for the purposes of this Section, may be
26 less than required for similar loans not covered by this

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1 Section, provided the applicants demonstrate adequate
2 business experience, entrepreneurial training or
3 combination thereof, as determined by the Department.
4 (4) Shall be in such principal amount and form and
5 contain such terms and provisions with respect to security,
6 insurance, reporting, delinquency charges, default
7 remedies, and other matters as the Department shall
8 determine appropriate to protect the public interest and
9 consistent with the purposes of this Section. The terms and
10 provisions may be less than required for similar loans not
11 covered by this Section.
12(Source: P.A. 99-143, eff. 7-27-15.)
13 (30 ILCS 750/9-4.8 new)
14 Sec. 9-4.8. State Small Business Credit Initiative Fund.
15 (a) There is hereby created the State Small Business Credit
16Initiative Fund, also referred to in this Article as the "SSBCI
17Fund", as a special fund in the State treasury.
18 The purpose of the SSBCI Fund is to finance intermediary
19agreements, administration, technical assistance agreements,
20loans, grants, or investments in Illinois. Investments,
21administration grants, and financial aid shall be used for the
22purposes set forth in this Article. Loan financing shall be in
23the form of loan agreements pursuant to the terms and
24conditions set forth in this Article. All loans shall be
25conditioned on the project receiving financing from

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1participating lenders or other investors.
2 (b) The following amounts shall be deposited into the SSBCI
3Fund:
4 (1) all receipts, including dividends, principal and
5 interest payments, and royalties, from any applicable
6 loan, intermediary, or technical assistance agreement made
7 from the SSBCI Fund or from direct appropriations from the
8 Build Illinois Bond Fund or the General Revenue Fund by the
9 General Assembly entered into by the Department;
10 (2) all proceeds of assets of whatever nature received
11 by the Department as a result of default or delinquency
12 with respect to a loan agreement made from the SSBCI Fund
13 or from direct appropriations by the General Assembly,
14 including proceeds from the sale, disposal, lease, or
15 rental of real or personal property that the Department may
16 receive as a result thereof;
17 (3) any appropriations, grants, or gifts made to the
18 SSBCI Fund;
19 (4) any income received from interest on investments of
20 moneys in the SSBCI Fund;
21 (5) all moneys resulting from the collection of
22 premiums, fees charges, costs, and expenses described in
23 subsection (e) of Section 9-3.
24 (c) The Treasurer may invest moneys in the SSBCI Fund in
25securities constituting obligations of the United States
26Government, or in obligations the principal of and interest on

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1which are guaranteed by the United States Government, or in
2certificates of deposit of any State or national bank which are
3fully-secured by obligations guaranteed as to principal and
4interest by the United States Government.
5 Section 99. Effective date. This Act takes effect upon
6becoming law.
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