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Public Act 92-0864
HB4157 Enrolled LRB9215282REpk
AN ACT concerning community development financial
institutions.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Illinois Investment and Development Authority Act.
Section 5. Purpose. The purpose of this Act is to
create a State entity to support the creation and growth of
community development financial institutions, which provide
access to capital for business development, capital
investments, and other financing to expand private sector
activities in economically disadvantaged communities and for
low income people, by providing grants, loans, and technical
assistance to CDFIs. Assistance by this entity would (i)
expand financial services and capital access in economically
disadvantaged communities, (ii) provide support for the
creation of new small businesses and new jobs in economically
disadvantaged communities, (iii) create opportunities for
banks to get a federal incentive for investments in a CDFI,
(iv) increase this State's share of the money distributed
annually by the federal Community Development Financial
Institutions Fund, and (v) create a new partnership between
the State, banks and thrifts, and CDFIs.
Section 10. Definitions. In this Act:
"Authority" means the Illinois Investment and Development
Authority.
"Community development financial institution" or "CDFI"
means an Illinois community development financial institution
certified in accordance with the federal Community
Development Banking and Financial Institutions Act of 1994
(Public Law 103-325) and accredited by the Authority under
Section 50 of this Act.
Section 15. Creation of Illinois Investment and
Development Authority; members.
(a) There is created a political subdivision, body
politic and corporate, to be known as the Illinois Investment
and Development Authority. The exercise by the Authority of
the powers conferred by law shall be an essential public
function. The governing powers of the Authority shall be
vested in a body consisting of 11 members, including, as ex
officio members, the Commissioner of Banks and Real Estate
and the Director of Commerce and Community Affairs or their
designees. The other 9 members of the Authority shall be
appointed by the Governor, with the advice and consent of the
Senate, and shall be designated "public members". The public
members shall include representatives from banks and other
private financial services industries, community development
finance experts, small business development experts, and
other community leaders. Not more than 6 members of the
Authority may be of the same political party. The
Chairperson of the Authority shall be designated by the
Governor from among its public members.
(b) Six members of the Authority shall constitute a
quorum. However, when a quorum of members of the Authority is
physically present at the meeting site, other Authority
members may participate in and act at any meeting through the
use of a conference telephone or other communications
equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting
shall constitute attendance and presence in person at the
meeting of the person or persons so participating. All
official acts of the Authority shall require the approval of
at least 5 members.
(c) Of the members initially appointed by the Governor
pursuant to this Act, 3 shall serve until the third Monday in
January, 2004, 3 shall serve until the third Monday in
January, 2005, and 3 shall serve until the third Monday in
January, 2006 and all shall serve until their successors are
appointed and qualified. All successors shall hold office
for a term of 3 years commencing on the third Monday in
January of the year in which their term commences, except in
case of an appointment to fill a vacancy. Each member
appointed under this Section who is confirmed by the Senate
shall hold office during the specified term and until his or
her successor is appointed and qualified. In case of vacancy
in the office when the Senate is not in session, the Governor
may make a temporary appointment until the next meeting of
the Senate, when the Governor shall nominate such person to
fill the office, and any person so nominated who is confirmed
by the Senate, shall hold his or her office during the
remainder of the term and until his or her successor is
appointed and qualified.
(d) 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.
(e) The Governor may remove any public member of the
Authority in case of incompetency, neglect of duty, or
malfeasance in office, after service on the member of a copy
of the written charges against him or her and an opportunity
to be publicly heard in person or by counsel in his or her
own defense upon not less than 10 days notice.
Section 20. Executive Director; other employees. The
members of the Authority shall appoint an Executive Director
to hold office at the pleasure of the members. The Executive
Director shall be the chief administrative and operational
officer of the Authority, 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 legal and technical experts and other
consultants, as it may deem advisable and may prescribe these
persons' duties and fix their compensation.
Section 25. Powers of Authority.
(a) The Authority possesses all the powers as a body
corporate necessary and convenient to accomplish the purposes
of this Act, including, without any intended limitation upon
the general powers hereby conferred, all of the following:
(1) To enter into loans, contracts, and agreements
in any matter connected with any of its corporate
purposes and to invest its funds.
(2) To sue and be sued.
(3) To employ those agents, employees, and
independent contractors necessary to carry out its
purposes, and to fix their compensation, their benefits,
and the terms and conditions of their employment.
(4) To have and use a common seal and to alter the
seal at pleasure.
(5) To adopt all needful resolutions, by-laws, and
rules for the conduct of its business and affairs.
(6) To have and exercise all powers and be subject
to all duties usually incident to boards of directors of
corporations.
(b) The Authority shall not have the power to levy taxes
for any purpose whatsoever.
Section 30. Office. The Authority may maintain an
office or branch office anywhere in this State and may
utilize, without the payment of rent, any office facilities
that the State may conveniently make available to the
Authority.
Section 35. Secretary; treasurer; funds.
(a) The Authority shall appoint a secretary and
treasurer, who may be a member or members of the Authority,
to hold office at the pleasure of the Authority. Before
entering upon the duties of the respective offices, the
person or persons shall take and subscribe to the
constitutional oath of office, and the treasurer shall
execute a bond with corporate sureties to be approved by the
Authority. The bond shall be payable to the Authority in
whatever penal sum may be directed by the Authority,
conditioned upon the faithful performance of the duties of
the office and the payment of all money received by him or
her according to law and the orders of the Authority. The
Authority may, at any time, require a new bond from the
treasurer in such penal sum as may then be determined by the
Authority. The obligation of the sureties shall not extend
to any loss sustained by the insolvency, failure, or closing
of any savings and loan association or national or state bank
wherein the treasurer has deposited funds if the bank or
savings and loan association has been approved by the
Authority as a depository for these funds. The oaths of
office and the treasurer's bond shall be filed in the
principal office of the Authority.
(b) All funds of the Authority, including without
limitation (i) grants or loans from the federal government,
the State, or any agency or instrumentality of the State or
federal government, (ii) fees, service charges, interest, or
other investment earnings on its funds, (iii) payments of
principal of and interest on loans of its funds, and (iv)
revenue from any other source, except funds the application
of which is otherwise specifically provided for by
appropriation, resolution, grant agreement, lease agreement,
loan agreement, indenture, mortgage, trust agreement, or
other agreement, may be held by the Authority in its treasury
and be generally available for expenditure by the Authority
for any of the purposes authorized by this Act.
(c) In addition to investments authorized by Section 2
of the Public Funds Investment Act, funds of the Authority
may be invested in (i) obligations issued by any state, unit
of local government, or school district, which obligations
are rated at the time of purchase by a national rating
service within the 2 highest rating classifications without
regard to any rating refinement or gradation by numerical or
other modifier, or (ii) equity securities of an investment
company registered under the federal Investment Company Act
of 1940 whose sole assets, other than cash and other
temporary investments, are obligations that are eligible
investments for the Authority, provided that not more than
20% of the assets of the investment company may consist of
unrated obligations of the type described in clause (i) of
this subsection (c) that the board of directors of the
investment company has determined to be of comparable quality
to rated obligations described in clause (i) of this
subsection (c).
(d) Moneys appropriated by the General Assembly to the
Authority shall be held in the State treasury unless the Act
making the appropriation specifically states that the moneys
are appropriated to the Authority's treasury. Such funds as
are authorized to be held in the Authority's treasury,
deposited in any bank or savings and loan association, and
placed in the name of the Authority shall be withdrawn or
paid out only by check or draft upon the bank or savings and
loan association, signed by the treasurer and countersigned
by the Chairperson of the Authority. The Authority may
designate any of its members or any officer or employee of
the Authority to affix the signature of the Chairperson and
may designate another to affix the signature of the treasurer
to any check or draft for payment of salaries or wages and
for payment of any other obligations of not more than $2,500.
In case any person whose signature appears upon any check or
draft, issued pursuant to this Act, ceases to hold his or her
office before the delivery of the check or draft to the
payee, the signature nevertheless shall be valid and
sufficient for all purposes with the same effect as if the
person had remained in office until delivery of the check or
draft. A bank or savings and loan association may not
receive public funds as permitted by this Section unless it
has complied with the requirements established pursuant to
Section 6 of the Public Funds Investment Act.
Section 40. Conflict of interest.
(a) No member, officer, agent, or employee of the
Authority shall, in his or her own name or in the name of a
nominee, be an officer or director or hold an ownership
interest of more than 7.5% in any person, association, trust,
corporation, partnership, or other entity that is, in its own
name or in the name of a nominee, a party to a contract or
agreement upon which the member, officer, agent, or employee
may be called upon to act or vote. The prohibition of this
subsection (a) does not apply, however, to prohibit contracts
or agreements between the Authority and entities qualified
under Section 501 of the Internal Revenue Code of 1986 due to
a member of the Authority serving as an officer or director
of that entity.
(b) With respect to any direct or indirect interest,
other than an interest prohibited in subsection (a) of this
Section, in a contract or agreement upon which the member,
officer, agent, or employee may be called upon to act or
vote, a member, officer, agent, or employee of the Authority
shall disclose the interest to the secretary of the Authority
before the taking of final action by the Authority concerning
the contract or agreement and shall so disclose the nature
and extent of the interest and his or her acquisition of it,
and those disclosures shall be publicly acknowledged by the
Authority and entered upon the minutes of the Authority. If
a member, officer, agent, or employee of the Authority holds
such an interest, then he or she shall refrain (i) from any
further official involvement in regard to the contract or
agreement, (ii) from voting on any matter pertaining to the
contract or agreement, and (iii) from communicating with
members of the Authority or its officers, agents, and
employees concerning the contract or agreement.
Notwithstanding any other provision of law, any contract or
agreement entered into in conformity with this subsection (b)
shall not be void or invalid by reason of the interest
described in this subsection (b), nor shall any person so
disclosing the interest and refraining from further official
involvement as provided in this subsection (b) be guilty of
an offense, be removed from office, or be subject to any
other penalty on account of that interest.
(c) Any contract or agreement made in violation of
subsection (a) or (b) of this Section shall be null and void,
but shall not give rise to any action against the Authority.
Section 45. Audit; fiscal year; report. The accounts
and books of the Authority, including its receipts,
disbursements, contracts, and other matters relating to its
finances, operation, and affairs shall be examined and
audited at least once within each 2-year period by a firm of
certified public accountants, who shall certify its audit to
the State Comptroller. The fiscal year for the Authority
shall commence on July 1. As soon after the end of each
fiscal year as may be expedient, the Authority shall cause to
be prepared and printed a complete report and financial
statement of its operations and of its assets and
liabilities. A reasonably sufficient number of copies of
this report shall be printed for distribution to persons
interested, upon request, and a copy of the report shall be
filed with the Governor, the Secretary of State, the State
Comptroller, the Secretary of the Senate, and the Clerk of
the House of Representatives.
Section 50. Accreditation.
(a) A CDFI must be accredited by the Authority in order
to receive assistance from the Authority, unless otherwise
specified in this Act. The Authority may revoke accreditation
from a CDFI that no longer meets the Authority's
accreditation criteria. Accreditation of a CDFI under this
Act does not, in and of itself, qualify the CDFI to
participate in a financing program administered by the
Authority.
(b) Authority criteria for accreditation must include
certification under the federal Community Development Banking
and Financial Institutions Act of 1994 (Public Law 103-325)
and any other criteria that the Authority deems appropriate.
(c) The Authority shall accredit CDFIs in a manner to
ensure the use of CDFIs in all geographic regions of this
State to the greatest extent possible.
Section 55. Authority's responsibilities.
(a) The Authority shall make grants and low-rate loans
to CDFIs so that CDFIs may fill a credit gap by engaging in
below market rate financing in economically disadvantaged
communities and to low income people. As part of a grant or
loan agreement, a CDFI may request and the Authority may
consent to having the grant or loan proceeds paid directly to
a CDFI's creditor. As part of a loan agreement, the
Authority may require additional security from the CDFI,
including without limitation a pledge of a certain percentage
of the CDFI's assets or future earnings.
(b) The Authority shall provide technical assistance to
CDFIs to (i) expand the financial services the CDFI sector
offers, such as micro-business lending, facilities financing,
low income housing financing, and personal financial services
for low income persons, (ii) encourage the establishment of
downstate CDFIs, and (iii) provide technical assistance and
training to CDFIs' borrowers.
Section 60. Authority grants. The Authority may issue
grants to CDFIs or to nonprofit organizations that are
attempting to obtain federal certification or Authority
accreditation as a CDFI. The Authority may issue, in a
manner consistent with subsection (c) of Section 50 of this
Act, grants for the purpose of developing or enhancing the
ability of the CDFI or nonprofit organization to be
accredited as a CDFI under Section 50 of this Act and to
receive loans from the Authority under Section 65 of this
Act. The Authority may also issue grants or loans to
nonprofit organizations that have entered into a written
contract with a CDFI or a nonprofit organization receiving
grants from the Authority to obtain federal certification or
Authority accreditation as a CDFI.
In areas of this State where no CDFI exists and no
nonprofit organization is working to obtain certification or
accreditation as a CDFI, the Authority may issue grants to a
nonprofit organization deemed by the Authority to be
performing activities consistent with the goals of the
federal Community Development Banking and Financial
Institutions Act of 1994 (Public Law 103-325). The grants
shall be used by the nonprofit organization to provide
technical assistance, training, or other support to small
businesses or other for-profit or not-for-profit
organizations.
Section 65. Authority loans. The Authority may make
loans to CDFIs, from moneys appropriated for this purpose, on
such terms and conditions as the Authority may determine.
Loans shall be made and used in a manner consistent with the
requirements of the federal Community Development Banking and
Financial Institutions Act of 1994 (Public Law 103-325).
Loans to CDFIs may be made by the Authority as the sole
lender or in cooperation with participating investors
pursuant to agreements entered into in accordance with this
Act. Loan repayments shall be used by the Authority to make
new loans to CDFIs.
Section 70. Community development loans.
(a) CDFIs that receive loans from the Authority under
Section 65 of this Act shall make and use community
development loans pursuant to guidelines established by the
Authority and in a manner consistent with the federal
Community Development Banking and Financial Institutions Act
of 1994 (Public Law 103-325). The guidelines shall include
criteria for the approval of a portfolio of loans submitted
by CDFIs.
(b) In connection with community development loans under
this Section, the recipient of a loan must provide
certification to the Authority that the recipient does not
have any outstanding debts in the form of delinquent real
estate taxes or utility bills that are more than one year
outstanding.
Section 75. Report to General Assembly. Within 90 days
after the end of each fiscal year, the Authority shall
prepare a report for that fiscal year and file it with the
General Assembly as provided in Section 3.1 of the General
Assembly Organization Act. The report shall include the
amount of funds appropriated to the Authority that were
deposited by the Authority in special accounts in banks or
trust companies, the amount of disbursements made from the
special accounts, the number, name, and location of CDFIs
accredited by the Authority, and the number and amount of
grants to CDFIs or nonprofit organizations.
Passed in the General Assembly December 05, 2002.
Approved January 03, 2003.
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