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1 | AN ACT concerning State government.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||
5 | Economic Stabilization Trust Act. | ||||||||||||||||||||||||
6 | Section 5. Definitions.
As used in this Act: | ||||||||||||||||||||||||
7 | "Board" means the board of trustees of the Economic | ||||||||||||||||||||||||
8 | Stabilization Trust. | ||||||||||||||||||||||||
9 | "Trust" means the Economic Stabilization Trust. | ||||||||||||||||||||||||
10 | Section 10. Establishment. The Economic Stabilization | ||||||||||||||||||||||||
11 | Trust is established within State government. | ||||||||||||||||||||||||
12 | Section 15. Board of Trustees; officers; duties; | ||||||||||||||||||||||||
13 | liabilities; public records. | ||||||||||||||||||||||||
14 | (a) The Trust shall be governed by and its powers exercised | ||||||||||||||||||||||||
15 | by a board of trustees that shall consist of the Director of | ||||||||||||||||||||||||
16 | Commerce and Economic Opportunity and 4 persons appointed by | ||||||||||||||||||||||||
17 | the Governor, who shall together be experienced in the | ||||||||||||||||||||||||
18 | financial analysis of businesses, turnarounds of troubled | ||||||||||||||||||||||||
19 | businesses, the management of businesses, and the organization | ||||||||||||||||||||||||
20 | and operation of employee-owned businesses; provided that each | ||||||||||||||||||||||||
21 | trustee shall be experienced and knowledgeable in at least one |
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1 | of those areas. Each trustee appointed by the Governor shall | ||||||
2 | serve for 4 years, except that in making the initial | ||||||
3 | appointments the Governor shall appoint one trustee to serve | ||||||
4 | for 2 years, one trustee to serve for 3 years, and 2 trustees | ||||||
5 | to serve for 4 years. Any person appointed to fill a vacancy in | ||||||
6 | the office of trustee shall serve for only the unexpired term | ||||||
7 | of that trustee. A trustee may be reappointed. A trustee may be | ||||||
8 | removed from his appointment by the Governor for cause. The | ||||||
9 | Governor shall from time to time designate one trustee as | ||||||
10 | chairperson of the board of trustees. | ||||||
11 | (b) Three of the trustees of the Trust constitute a quorum, | ||||||
12 | and the affirmative vote of 3 trustees is necessary for any | ||||||
13 | action to be taken by the Trust. | ||||||
14 | (c) Trustees shall receive no compensation, but each is | ||||||
15 | entitled to reimbursement for his or her actual and necessary | ||||||
16 | expenses incurred in the performance of his or her official | ||||||
17 | duties. | ||||||
18 | (d) The Trust may invest in, purchase from, sell to, borrow | ||||||
19 | from, loan to, contract with, or otherwise deal with any person | ||||||
20 | or entity in which any trustee is in any way interested or | ||||||
21 | involved; provided that the interest or involvement is | ||||||
22 | disclosed in advance to the members of the board and recorded | ||||||
23 | in the minutes of the board; and provided further that no | ||||||
24 | trustee having such an interest or involvement may participate | ||||||
25 | in any decision of the board relating to that person or entity. | ||||||
26 | (e) The trustees shall elect a secretary and treasurer and |
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1 | may elect or appoint other officers as they may deem necessary, | ||||||
2 | none of whom shall be required to be members of the board. The | ||||||
3 | secretary shall keep a record of the proceedings of the board | ||||||
4 | and shall be custodian of all books, documents, and papers | ||||||
5 | filed by the trustees and of its minute book and seal. The | ||||||
6 | secretary shall cause copies to be made of all minutes and | ||||||
7 | other records and documents of the Trust and shall certify that | ||||||
8 | those copies are true copies, and all persons dealing with the | ||||||
9 | Trust may rely upon the certification. The treasurer shall be | ||||||
10 | the chief financial and accounting officer of the Trust and | ||||||
11 | shall be in charge of its moneys, books of account, and | ||||||
12 | accounting records. | ||||||
13 | (f) All officers and employees of the Trust having access | ||||||
14 | to its cash and negotiable securities shall give bond to the | ||||||
15 | Trust at its expense in such amounts and with such surety as | ||||||
16 | the board may prescribe. The persons required to give bond may | ||||||
17 | be included in one or more blanket or scheduled bonds. | ||||||
18 | (g) Trustees shall not be liable to the State or to any | ||||||
19 | other person as a result of their activities, whether | ||||||
20 | ministerial or discretionary, as trustees, except for willful | ||||||
21 | dishonesty or intentional violations of the law. The Trust may | ||||||
22 | purchase liability insurance for trustees, officers, and | ||||||
23 | employees and may indemnify those persons against claims of | ||||||
24 | others. | ||||||
25 | (h) Any documentary materials, data, or conversations | ||||||
26 | whatsoever made or received by any trustee or employee of the |
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1 | Trust and consisting of, or to the extent that the materials, | ||||||
2 | data, or conversations consist of, trade secrets or commercial | ||||||
3 | or financial information regarding the operation of any | ||||||
4 | business conducted by an applicant for assistance that the | ||||||
5 | Trust is empowered to render or regarding the competitive | ||||||
6 | position of the applicant in a particular field of endeavor, | ||||||
7 | shall not be deemed public records of the Trust and | ||||||
8 | specifically are exempt from the Freedom of Information Act. | ||||||
9 | Any discussion or consideration of an applicant's trade secrets | ||||||
10 | or commercial or financial information may be held by the | ||||||
11 | trustees in a closed meeting, but the purpose of any such | ||||||
12 | closed meeting shall be set forth in the official minutes of | ||||||
13 | the Trust and no business that is directly related to such | ||||||
14 | purpose shall be transacted nor shall any vote be taken during | ||||||
15 | the closed meeting. | ||||||
16 | Section 20. Trust employees. The board shall employ an | ||||||
17 | executive director to serve as the chief executive, | ||||||
18 | administrative, and operational officer of the Trust. The | ||||||
19 | executive director shall attend meetings of the Trust, and | ||||||
20 | shall direct the resources and staff of the Trust to achieve | ||||||
21 | the purposes of this Act. | ||||||
22 | Section 25. Trust purposes; loan loss standards. | ||||||
23 | (a) The purposes of the Trust are: | ||||||
24 | (1) To provide flexible high risk financing necessary |
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1 | to implement a change of ownership, a corporate | ||||||
2 | restructuring, or a turnaround plan for an economically | ||||||
3 | viable but troubled business that faces the likelihood of a | ||||||
4 | large employment loss, plant closure, or failure without a | ||||||
5 | change of ownership, corporate restructuring, or | ||||||
6 | turnaround plan. The Trust may also provide assistance to | ||||||
7 | firms in specific mature industries for the purpose of | ||||||
8 | technological investment or upgrading of management | ||||||
9 | operations in order for the business to maintain future | ||||||
10 | economic stability. The financial participation of the | ||||||
11 | Trust is aimed at supplementing private financial | ||||||
12 | institutions and public economic development agencies when | ||||||
13 | those institutions and agencies are not able to provide all | ||||||
14 | the financing or bear all of the risk necessary to transfer | ||||||
15 | ownership, restructure, or turnaround a business in a | ||||||
16 | situation where the business might otherwise fail or | ||||||
17 | greatly reduce its employment. | ||||||
18 | (2) To provide flexible high risk financing in | ||||||
19 | connection with the start-up of employee-owned businesses | ||||||
20 | or the implementation of employee-ownership projects. The | ||||||
21 | financial participation of the Trust is aimed at | ||||||
22 | supplementing private financial institutions and public | ||||||
23 | economic development agencies when those institutions and | ||||||
24 | agencies are not able to provide all the financing or bear | ||||||
25 | all of the risk necessary to start-up an employee-owned | ||||||
26 | business or implement an employee-ownership project. Not |
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1 | less than 10% of the financing provided pursuant to this | ||||||
2 | Act shall be targeted to businesses that are employee-owned | ||||||
3 | businesses; provided that any portion of that 10% that is | ||||||
4 | not expended for the purposes of employee-owned business | ||||||
5 | may be expended for other purposes authorized in this Act. | ||||||
6 | (b) In the performance of its purposes, the Trust shall be | ||||||
7 | deemed to be investing not on the basis of a direct financial | ||||||
8 | return on its investment but in order to reduce the social | ||||||
9 | costs of a large employment loss, plant closure or business | ||||||
10 | failure and to obtain the financial benefits the State receives | ||||||
11 | from maintaining the operations and employment of viable | ||||||
12 | businesses. The Trust shall not be held to the loan loss | ||||||
13 | standards of private commercial lenders. | ||||||
14 | Section 30. Trust powers. The Trust shall have the power | ||||||
15 | to: | ||||||
16 | (1) Make, amend, and repeal rules for the management of | ||||||
17 | its affairs. | ||||||
18 | (2) Adopt an official seal. | ||||||
19 | (3) Sue and be sued, in its own name. | ||||||
20 | (4) Make contracts and execute all instruments | ||||||
21 | necessary or convenient for the carrying out of its | ||||||
22 | business. | ||||||
23 | (5) Enter into agreements or other transactions with | ||||||
24 | any federal, State, or local government agency. | ||||||
25 | (6) Acquire real property, or an interest therein, by |
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1 | purchase or foreclosure when acquisition is necessary or | ||||||
2 | appropriate to protect or secure any investment or loan in | ||||||
3 | which the Trust has an interest; to sell, transfer, and | ||||||
4 | convey any real property to a buyer, and, in the event a | ||||||
5 | sale, transfer, or conveyance cannot be effected with | ||||||
6 | reasonable promptness or at a reasonable price, to lease | ||||||
7 | the property to a tenant. | ||||||
8 | (7) Invest funds not required for immediate | ||||||
9 | disbursement in investments as may be lawful for | ||||||
10 | fiduciaries in the State. | ||||||
11 | (8) Appoint officers, employees, consultants, agents, | ||||||
12 | and advisors and prescribe their duties and fix their | ||||||
13 | compensation within the limitations provided by law. | ||||||
14 | (9) Appear in its own behalf before boards, | ||||||
15 | commissions, departments, or other agencies of local, | ||||||
16 | State, or federal government. | ||||||
17 | (10) Consent, whenever it deems it necessary or | ||||||
18 | desirable in the fulfillment of the purposes of this Act, | ||||||
19 | to the modification with respect to rate of interest, time | ||||||
20 | of payment of any installment of principal or interest, or | ||||||
21 | any other terms of any contract or agreement of any kind to | ||||||
22 | which the Trust is a party. | ||||||
23 | (11) Apply for and accept grants, donations, and | ||||||
24 | bequests of money, property, labor, or other things of | ||||||
25 | value to be held, used, and applied for the purposes of | ||||||
26 | this Act; receipt of donations and grants shall be detailed |
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1 | in the annual report of the Trust, including the identity | ||||||
2 | of the donor, the nature of the transaction, and any | ||||||
3 | conditions attached thereto. | ||||||
4 | (12) Make loans to or otherwise finance or invest in | ||||||
5 | any business or person seeking to purchase a business to | ||||||
6 | further the purposes of this Act; provided that loans or | ||||||
7 | investments comply with the provisions of this Act. | ||||||
8 | (13) Establish and collect fees, charges, and interest | ||||||
9 | rates the Trust determines reasonable. | ||||||
10 | (14) Require, by contract in any financing agreement or | ||||||
11 | otherwise, specific operational activities, financial | ||||||
12 | actions, or management changes as conditions for the | ||||||
13 | receipt of any loan, financing, or investment from the | ||||||
14 | Trust. | ||||||
15 | (15) Do any and all things necessary or convenient to | ||||||
16 | carry out its purposes and exercise the powers expressly | ||||||
17 | granted under this Act. | ||||||
18 | Section 35. Application for financing from Trust; review; | ||||||
19 | approval or denial. Any business or person seeking financing | ||||||
20 | from the Trust shall submit to the executive director a | ||||||
21 | complete application for financing and any other information | ||||||
22 | the board shall request. The board shall review the application | ||||||
23 | for financing and, based upon the information submitted and any | ||||||
24 | additional investigation the trustees may deem necessary, | ||||||
25 | approve or deny the application subject to the following |
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1 | requirements: | ||||||
2 | (1) Before approving an application for assistance in | ||||||
3 | connection with the purchase of a troubled business, the | ||||||
4 | board shall determine and incorporate in its minutes that: | ||||||
5 | (A) the business is likely to experience a large | ||||||
6 | loss of employment, plant closure, or failure without | ||||||
7 | the loan financing or investment by the Trust; | ||||||
8 | (B) the business within a specific mature industry | ||||||
9 | requires assistance for the purpose of technological | ||||||
10 | investment or upgrading of management operations in | ||||||
11 | order for the business to maintain future economic | ||||||
12 | stability; | ||||||
13 | (C) the business or person seeking to purchase the | ||||||
14 | business has taken or will take actions the board deems | ||||||
15 | necessary to insure the business has a reasonable | ||||||
16 | chance to continue as a successful business, | ||||||
17 | including, but not limited to, changes in its | ||||||
18 | operations, financing, or management, and that those | ||||||
19 | actions are included as a condition for financing by | ||||||
20 | the Trust in the financing agreement; and | ||||||
21 | (D) the business or person seeking to purchase the | ||||||
22 | business has made diligent efforts to obtain the | ||||||
23 | financing necessary to continue its operations or | ||||||
24 | transfer ownership of the business from private | ||||||
25 | financial institutions and public economic development | ||||||
26 | agencies, and such financing is unavailable or has been |
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1 | offered on terms that would prevent the successful | ||||||
2 | continuation or change in ownership of the business. | ||||||
3 | (2) Before approving an application for assistance in | ||||||
4 | connection with an employee-owned business or an | ||||||
5 | employee-ownership project, the board shall consult with | ||||||
6 | the executive director and after receiving the | ||||||
7 | recommendation of the executive director, shall determine | ||||||
8 | and incorporate in its minutes that: | ||||||
9 | (A) the business or person seeking assistance has | ||||||
10 | taken or will take actions the board and the executive | ||||||
11 | director deem necessary to insure that the | ||||||
12 | employee-ownership project has a reasonable chance to | ||||||
13 | succeed; and | ||||||
14 | (B) except with respect to assistance for | ||||||
15 | pre-feasibility and feasibility studies, that the | ||||||
16 | business or person has made diligent efforts to obtain | ||||||
17 | the financing necessary to institute or implement the | ||||||
18 | employee-ownership project from private financial | ||||||
19 | institutions and public economic development agencies, | ||||||
20 | and that financing is unavailable or has been offered | ||||||
21 | on terms that would prevent the successful institution | ||||||
22 | or implementation of the project. | ||||||
23 | Section 40. Annual report; audit. | ||||||
24 | (a) The Trust shall annually submit a complete and detailed | ||||||
25 | report of the Trust's activities within 90 days after the end |
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1 | of each fiscal year to the Governor, to the Clerk of the House | ||||||
2 | of Representatives, and to the Secretary of the Senate. The | ||||||
3 | report shall include (i) all the businesses or persons that | ||||||
4 | received financing from the Trust, (ii) the number of direct | ||||||
5 | jobs created, saved, or maintained, (iii) the indirect | ||||||
6 | employment created, saved, or maintained, (iv) the location and | ||||||
7 | wage level of direct jobs created, saved, or maintained, and | ||||||
8 | (v) the fiscal benefits to the State in the form of tax | ||||||
9 | revenues generated and social welfare expenditure avoided as a | ||||||
10 | result of the business and employment maintained by the Trust. | ||||||
11 | (b) The Trust is subject to a biennial audit by the Auditor | ||||||
12 | General.
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