HB2097ham001 97TH GENERAL ASSEMBLY

Rep. Adam Brown

Filed: 3/15/2011

09700HB2097ham001 LRB097 05068 PJG 53078 a

AMENDMENT TO HOUSE BILL 2097

AMENDMENT NO. ______. Amend House Bill 2097 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Finance Authority Act is amended by changing Sections 801-15, 810-20, 840-5, and 840-20 as follows:

(20 ILCS 3501/801-15)

Sec. 801-15. There is hereby created a body politic and corporate to be known as the Illinois Finance Authority. The exercise of the powers conferred by law shall be an essential public function. The Authority shall consist of 15 members, who shall be appointed by the Governor, with the advice and consent of the Senate. Upon the appointment of the Board and every 2 years thereafter, the chairperson of the Authority shall be selected by the Governor to serve as chairperson for two years. Appointments to the Authority shall be persons of recognized ability and experience in one or more of the following areas: economic development, finance, banking, industrial development, small business management, real estate development, housing, health facilities financing, local government financing, community development, venture finance, construction, and labor relations, agribusiness, and production agriculture. At the time of appointment, the Governor shall designate 5 members to serve until the third Monday in July 2005, 5 members to serve until the third Monday in July 2006 and 5 members to serve until the third Monday in July 2007. Thereafter, appointments shall be for 3-year terms. On or after the effective date of this amendatory Act of the 97th General Assembly, no fewer than 2 members of or 2 appointments to the Authority, or a combination thereof, shall be persons of recognized ability and experience in agribusiness or production agriculture; provided, however, that in the event a member of recognized ability and experience in agribusiness or production agriculture resigns, becomes incapacitated, or is otherwise unable to discharge his or her duties as a member of the Authority, such vacancy or inability to serve shall not otherwise adversely affect the requirements for a quorum, nor prohibit the Authority from exercising its powers conferred by law during the time of such vacancy or inability to act. A member shall serve until his or her successor shall be appointed and have qualified for office by filing the oath and bond. Members of the Authority shall not be entitled to compensation for their services as members, but shall be entitled to reimbursement for all necessary expenses incurred in connection with the performance of their duties as members. The Governor may remove any member of the Authority in case of incompetence, neglect of duty, or malfeasance in office, after service on him of a copy of the written charges against him and an opportunity to be publicly heard in person or by counsel in his own defense upon not less than 10 days' notice. From nominations received from the Governor, the members of the Authority shall appoint an Executive Director who shall be a person knowledgeable in the areas of financial markets and instruments, to hold office for a one-year term. The Executive Director shall be the chief administrative and operational officer of the Authority and shall direct and supervise its administrative affairs and general management and perform such other duties as may be prescribed from time to time by the members and shall receive compensation fixed by the Authority. The Executive Director or any committee of the members may carry out such responsibilities of the members as the members by resolution may delegate. The Executive Director shall attend all meetings of the Authority; however, no action of the Authority shall be invalid on account of the absence of the Executive Director from a meeting. The Authority may engage the services of such other agents and employees, including attorneys, appraisers, engineers, accountants, credit analysts and other consultants, as it may deem advisable and may prescribe their duties and fix their compensation. The Authority may appoint Advisory Councils to (1) assist in the formulation of policy goals and objectives, (2) assist in the coordination of the delivery of services, (3) assist in establishment of funding priorities for the various activities of the Authority, and (4) target the activities of the Authority to specific geographic regions. There may be an Advisory Council on Economic Development. The Advisory Council shall consist of no more than 12 members, who shall serve at the pleasure of the Authority. Members of the Advisory Council shall receive no compensation for their services, but may be reimbursed for expenses incurred with their service on the Advisory Council.

(Source: P.A. 93-205, eff. 1-1-04.)

(20 ILCS 3501/810-20)

Sec. 810-20. Powers and Duties; Illinois Venture Investment Fund Limits. The Authority shall invest and reinvest the Fund and the income, thereof, in the following ways:

(a) To make a direct investment in qualified securities issued by enterprises and to dispose of those securities within 10 years after the date of the direct investment as determined by the Authority for the purpose of providing venture capital or seed capital, provided that the investment shall not exceed 49% of the estimated cost of development, testing, and initial production and marketing and associated working capital for the technology, product, process, or invention, or $750,000, whichever is less;

(b) To enter into written agreements or contracts (including limited partnership agreements) with one or more professional investors or one or more seed capital investors, if any, for the purpose of establishing a pool of funds to be used exclusively as venture capital or seed capital investments. The Authority shall not invest more than $2,000,000 in a single pool of funds or affiliated pools of funds. The agreement or contract shall provide for the pool of funds to be managed by a professional investor. The manager may be the general partner of a limited partnership of which the Authority is a limited partner. The agreement or contract may provide for reimbursement of expenses of, and payment of a fee to, the manager. The agreement or contract may also provide for payment to the manager of a percentage, not to exceed 40% (computed on an annual basis), of cash and other property payable to the Authority as its pro-rata share of distributions to investors in the pool of funds, provided that (i) no amount shall be received by the manager upon sale or other disposition of qualified investments in enterprises until recovery by the Authority of its investment and upon liquidation or withdrawal of the Authority from the pool of funds, the manager shall be obligated to refund any amount received by it from such percentage if necessary to allow the Authority to recover its investment or (ii) the terms of payment of cash and other property to the Authority are no less favorable to the Authority than payments to other seed capital investors (other than the manager) who are parties to the agreement or contract.

(c) To make co-venture investments by entering into agreements with one or more professional investors or one or more seed capital investors, if any, who have formally agreed to invest at least 50% as much as the Authority invests in the enterprise, for the purpose of providing venture capital or seed capital; but no more than $1,000,000 shall be invested by the Authority in the qualified securities of a single enterprise. A total of not more than $1,500,000 may be invested in the securities of a single enterprise, if the Authority shall find, after the initial investment by the Authority, that additional investments in the enterprise are necessary to protect or enhance the initial investment of the Authority. Each co-venture investment agreement shall provide that the Authority will recover its investment before or simultaneously with any distribution to participating professional investors or seed capital investors. The Authority and participating professional investors and seed capital investors shall share ratably in the profits earned in any form on the co-venture investment, but the Authority may, at its discretion, agree to pay to a participating professional investor a percentage, not to exceed 40% (computed on an annual basis), of cash and other property payable to the Authority as its pro-rata share of distributions to investors in the pool of funds, provided that (i) no amount shall be received by the participating professional investor upon sale or other disposition of qualified investments in the enterprises until recovery by the Authority of its investment and upon liquidation or withdrawal of the Authority from the pool of funds, the participating professional investor shall be obligated to refund any amount received by it from such percentage if necessary to allow the Authority to recover its investment or (ii) the terms of payment of cash and other property to the Authority are no less favorable to the Authority than payments to other seed capital investors or professional investors (other than the professional investor) who are parties to the agreement or contract;

(d) To purchase qualified securities of certified development corporations created under Section 503 of the federal Small Business Administration Act, including the Illinois Small Business Growth Corporation, for the purpose of making loans to enterprises that have the potential to create substantial employment within the State per dollar invested by the Authority, provided that the investment does not exceed 25% of the total investment in each corporation at the time the investment is approved by the Authority. Investment by the Authority in the Illinois Small Business Growth Corporation is not limited by the foregoing provision;

(e) To purchase qualified securities of small business investment companies and minority enterprise small business investment corporations certified by the federal Small Business Administration which are committed to making 60% of their investments in the State, provided that investments from the Fund do not exceed 25% of the total investment in these entities at the time the investment is approved by the Authority;

(f) To make the investments of any funds held in reserves or sinking funds, or any funds not required for immediate disbursement, as may be lawful investments for fiduciaries in the State;

(g) To facilitate and promote the acquisition and revitalization of existing manufacturing enterprises by developing and maintaining a list of firms, or divisions thereof, located within the State that are available for purchase, merger, or acquisition in response to a request from the General Assembly. As such information is outside the knowledge of the Authority and not otherwise readily obtained, the list shall be created from information provided by third parties, including, but not limited to, investment bankers, commercial bankers, trade associations, chambers of commerce, and similar institutions. The list may shall be made available at such charges as the Authority may determine to all interested persons and institutions upon request. No firm shall appear on the list without its prior written permission. The list may contain such additional financial, technical, market and other information as may be supplied by the listed firm. The Authority shall bear no responsibility for the accuracy of the information contained on the list, and each listed firm shall hold the Authority harmless against any claim of inaccuracy. Enterprises supported by investments from the Fund shall receive consideration by the Authority in the allocation of loans to be insured or loans to be made from the proceeds of bonds to be insured by the Industrial Revenue Bond Insurance Fund established under this Article, and the Authority shall coordinate its activities under the 2 programs.

(Source: P.A. 93-205, eff. 1-1-04.)

(20 ILCS 3501/840-5)

Sec. 840-5. The Authority shall have the following powers:

(a) To fix and revise from time to time and charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by a project or other health facilities owned, financed or refinanced by the Authority or any portion thereof and to contract with any person, partnership, association or corporation or other body, public or private, in respect thereto; to coordinate its policies and procedures and cooperate with recognized health facility rate setting mechanisms which may now or hereafter be established.

(b) To establish rules and regulations for the use of a project or other health facilities owned, financed or refinanced by the Authority or any portion thereof and to designate a participating health institution as its agent to establish rules and regulations for the use of a project or other health facilities owned by the Authority undertaken for that participating health institution.

(c) To establish or contract with others to carry out on its behalf a health facility project cost estimating service and to make this service available on all projects to provide expert cost estimates and guidance to the participating health institution and to the Authority. In order to implement this service and, through it, to contribute to cost containment, the Authority shall have the power to require such reasonable reports and documents from health facility projects as may be required for this service and for the development of cost reports and guidelines. The Authority may appoint a Technical Committee on Health Facility Project Costs and Cost Containment.

(d) To make mortgage or other secured or unsecured loans to or for the benefit of any participating health institution for the cost of a project in accordance with an agreement between the Authority and the participating health institution; provided that no such loan shall exceed the total cost of the project as determined by the participating health institution and approved by the Authority; provided further that such loans may be made to any entity affiliated with a participating health institution if the proceeds of such loan are made available to or applied for the benefit of such participating health institution.

(e) To make mortgage or other secured or unsecured loans to or for the benefit of a participating health institution in accordance with an agreement between the Authority and the participating health institution to refund outstanding obligations, loans, indebtedness or advances issued, made, given or incurred by such participating health institution for the cost of a project; including the function to issue bonds and make loans to or for the benefit of a participating health institution to refinance indebtedness incurred by such participating health institution in projects undertaken and completed or for other health facilities acquired prior to or after the enactment of this Act when the Authority finds that such refinancing is in the public interest, and either alleviates a financial hardship of such participating health institution, or is in connection with other financing by the Authority for such participating health institution or may be expected to result in a lessened cost of patient care and a saving to third parties, including government, and to others who must pay for care, or any combination thereof; provided further that such loans may be made to any entity affiliated with a participating health institution if the proceeds of such loan are made available to or applied for the benefit of such participating health institution.

(f) To mortgage all or any portion of a project or other health facilities and the property on which any such project or other health facilities are located whether owned or thereafter acquired, and to assign or pledge mortgages, deeds of trust, indentures of mortgage or trust or similar instruments, notes, and other securities of participating health institutions to which or for the benefit of which the Authority has made loans or of entities affiliated with such institutions and the revenues therefrom, including payments or income from any thereof owned or held by the Authority, for the benefit of the holders of bonds issued to finance such project or health facilities or issued to refund or refinance outstanding obligations, loans, indebtedness or advances of participating health institutions as permitted by this Act.

(g) To lease to a participating health institution the project being financed or refinanced or other health facilities conveyed to the Authority in connection with such financing or refinancing, upon such terms and conditions as the Authority shall deem proper, and to charge and collect rents therefor and to terminate any such lease upon the failure of the lessee to comply with any of the obligations thereof; and to include in any such lease, if desired, provisions that the lessee thereof shall have options to renew the lease for such period or periods and at such rent as shall be determined by the Authority or to purchase any or all of the health facilities or that upon payment of all of the indebtedness incurred by the Authority for the financing of such project or health facilities or for refunding outstanding obligations, loans, indebtedness or advances of a participating health institution, then the Authority may convey any or all of the project or such other health facilities to the lessee or lessees thereof with or without consideration.

(h) To make studies of needed health facilities that could not sustain a loan were it made under this Act and to recommend remedial action to the General Assembly; to do the same with regard to any laws or regulations that prevent health facilities from benefiting from this Act.

(i) To assist the Department of Commerce and Economic Opportunity to establish and implement a program to assist health facilities to identify and arrange financing for energy conservation projects in buildings and facilities owned or leased by health facilities.

(j) To assist the Department of Human Services in establishing a low interest loan program to help child care centers and family day care homes serving children of low income families under Section 22.4 of the Children and Family Services Act. The Authority, on or after the effective date of this amendatory Act of the 97th General Assembly, shall be authorized to convert existing agreements for financial aid in accordance with this subsection to permanent capital to leverage additional private capital and establish a revolving loan fund for nonprofit corporations providing human services under contract to the State.

(k) To assist the Department of Public Health and nursing homes in undertaking nursing home conversion projects in accordance with the Older Adult Services Act.

(Source: P.A. 93-205, eff. 1-1-04; 93-1031, eff. 8-27-04.)

(20 ILCS 3501/840-20)

Sec. 840-20. It is the intent and purpose of this Act that the exercise by the Authority of the powers granted to it shall be in all respects for the benefit of the people of this State to assist them to provide needed health facilities of the number, size, type, distribution, and operation that will assure admission and care of high quality to all who need it. To this end, the Authority is charged with the responsibility to identify and study all projects which are determined by health planning agencies to be needed but which could not sustain a loan were such to be made to it under this Act. The Authority shall, following such study, formulate and recommend to the General Assembly, such amendments to this and other Acts, and such other specific measures as grants, loan guarantees, interest subsidies or other actions as may be provided for by the State which actions would render the construction and operation of such needed health facility feasible and in the public interest. Further, the Authority is charged with responsibility to respond to any requests from the General Assembly to identify and study any laws or regulations which it finds handicaps or bars a needed health facility from participating in the benefits of this Act and to recommend to the General Assembly such actions as will remedy such situation.

(Source: P.A. 93-205, eff. 1-1-04.)

Section 99. Effective date. This Act takes effect upon becoming law.".