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Public Act 098-0117 | ||||
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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: | ||||
(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. |
"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 |
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 | ||
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 |
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 |
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 |
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 |
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. | ||
Section 10. The State Finance Act is amended by adding | ||
Sections 5.826 and 8r as follows: | ||
(30 ILCS 105/5.826 new) | ||
Sec. 5.826. The Working Capital Revolving Loan Fund. | ||
(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 |
equal to or greater than $6,000,000.
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Section 99. Effective date. This Act takes effect July 1, | ||
2013. |