State of Illinois
91st General Assembly
Legislation

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91_SB0786enr

 
SB786 Enrolled                                LRB9100876DHmbB

 1        AN ACT promoting micro-enterprise and self-employment  in
 2    Illinois.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 1. Short title. This Act  may  be  cited  as  the
 6    Micro-Enterprise and Self-Employment Assistance Act.

 7        Section 5. Definitions. In this Act:
 8        "Department"  means  the  Illinois Department of Commerce
 9    and Community Affairs.
10        "Micro-enterprise" means a new  or  existing  very  small
11    business  entity  or self-employed individual with 5 or fewer
12    employees whose capital needs  are  too  small  generally  to
13    obtain  business  credit  from regulated commercial financial
14    institutions.
15        "Microcredit" means the  practice  of  lending  money  or
16    extending    other    forms    of    business    credit    to
17    micro-enterprises.
18        "Small non-bank lender" or "SNBL" means an entity that is
19    not  regulated  by  the  Office of Banks and Real Estate, the
20    Department of Financial Institutions, or any  agency  of  the
21    United  States  government,  and that is primarily engaged in
22    providing microcredit to micro-enterprises.

23        Section 10. Legislative findings.
24        (a)  Micro-enterprise is  important  to  the  economy  of
25    Illinois.   Very  small  businesses  provide  livelihoods  to
26    thousands of people in this State  and  produce  and  provide
27    essential  goods  and  services.  Most  micro-enterprises are
28    businesses operated by a  single  self-employed  person  with
29    few,  if  any,  additional  employees.  Self-employed persons
30    comprise more than 8% of the total workforce in Illinois.
 
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 1        (b)  Micro-enterprise is an important component  of  this
 2    State's  welfare-to-work  policy.   Micro-enterprise provides
 3    individuals with opportunities for economic  self-sufficiency
 4    and  self-respect.   Owning  and  operating  one's  own small
 5    business should be a viable alternative  to  welfare  and  to
 6    traditional wage-labor employment. It is in the best interest
 7    of  this State and its economy that individuals be encouraged
 8    to form and operate their own small businesses.
 9        (c)  Lack of access to capital is a  serious  barrier  to
10    starting  and  successfully  operating a very small business.
11    Traditional financial institutions cannot profitably  provide
12    business credit to micro-enterprises.  The high relative cost
13    of  making  and  servicing  loans  to  very  small businesses
14    discourages commercial banks from making those loans. Minimum
15    loan size requirements deprive micro-enterprises of access to
16    traditional sources of business  loans  and  have  created  a
17    credit   gap  for  very  small  businesses.   Trends  in  the
18    financial services industry may exacerbate  this  problem  by
19    causing  commercial  banks  to  concentrate  on  larger, more
20    profitable loans.
21        (d)  Many prospective micro-entrepreneurs lack the  basic
22    business  knowledge  and  experience  necessary  to  own  and
23    operate   a  successful  small  business  venture.  Providing
24    adequate business education, training and counseling services
25    to micro-enterprises can substantially increase their chances
26    of success.  It is in the best  interests  of  Illinois  that
27    Illinois micro-entrepreneurs have access to adequate business
28    training  programs,  counseling  services, and other forms of
29    technical assistance.
30        (e)  Small non-bank lenders provide the principal  source
31    of  microcredit  for  many micro-enterprises.  Various public
32    and private entities have formed SNBL's to  fill  the  credit
33    gap  that  exists  for  very  small  businesses  in Illinois.
34    Micro-loans  provided  by   SNBL's   are   often   the   only
 
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 1    institutional     source     of    capital    available    to
 2    micro-enterprises.    Coordinating    technical    assistance
 3    programs for micro-enterprises with credit provided by SNBL's
 4    can  significantly  increase the success rates of microcredit
 5    loans.   Assisting   technical   assistance   providers   and
 6    encouraging good microcredit practices by SNBL's are  in  the
 7    public interest.
 8        (f)  It  is  in  the best interests of this State and the
 9    micro-enterprises  operating  in  this  State  that  programs
10    assisting  self-employed  persons  and  small  businesses  be
11    well-publicized, coordinated, and accessible to all  eligible
12    micro-enterprises.    This  State  and  its  units  of  local
13    government  sponsor  many  programs  intended  primarily   to
14    benefit  small  business.   These  programs  include training
15    programs,  business  counseling  services,   loan   programs,
16    specialized     grants,     tax    incentives,    procurement
17    opportunities, and other small business assistance  services.
18    Many  of  these programs also benefit SNBL's by enhancing the
19    credit  and  business  opportunities  of   micro-enterprises.
20    Modem  communications technology, including the Internet, can
21    increase  the  effectiveness  and   availability   of   these
22    programs.

23        Section  15.  Micro-Enterprise  Council. There is created
24    within  the  Department   the   Micro-Enterprise   Assistance
25    Council.   The  Council shall consist of 11 members.   One of
26    the members shall be the Director of the Department or his or
27    her  designee,  one  shall  be  the  Director  of   Financial
28    Institutions  or  his  or  her  designee,  one  shall  be the
29    Secretary of Human Services or his or her designee,  and  one
30    shall  be  the  chair  of the Illinois State Micro-Enterprise
31    Initiative or his or her designee.  Three  members  shall  be
32    appointed  by  the  Governor. Of the remaining 4 members, one
33    shall be appointed by the President of the Senate, one by the
 
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 1    Minority Leader of the Senate, one  by  the  Speaker  of  the
 2    House  of  Representatives, and one by the Minority Leader of
 3    the House of Representatives.   Appointed  members  shall  be
 4    uniquely  qualified  by education, professional knowledge, or
 5    experience to serve on the Council.  Appointed members  shall
 6    include  operators  of  micro-enterprises, representatives of
 7    SNBL's,   financial   institutions,   technical    assistance
 8    providers,  and  other  individuals  who  have been active in
 9    assisting micro-enterprises and  SNBL's.   Appointed  members
10    shall  reflect the geographic, cultural, and ethnic diversity
11    of this State.
12        Of the initial appointments, members  shall  be  randomly
13    assigned to staggered terms; 4 members shall be appointed for
14    a term of 3 years, 4 members shall be appointed for a term of
15    2  years,  and 3 members shall be appointed for a term of one
16    year. Upon the expiration of each member's term, a  successor
17    shall  be  appointed  for a term of 3 years. In the case of a
18    vacancy in the office of any member,  a  successor  shall  be
19    appointed  for  the  remainder  of  the unexpired term by the
20    person designated as responsible for making the  appointment.
21    No member shall serve more than 3 consecutive terms.  Members
22    shall  serve without compensation but shall be reimbursed for
23    expenses incurred in connection with the performance of their
24    duties as members.
25        One of the members shall be designated as chairperson  by
26    the   Governor.    If  the  Governor  does  not  appoint  the
27    chairperson within 60 days after the effective date  of  this
28    Act,  the  Council shall convene and elect a chairperson by a
29    simple majority vote. Upon  a  vacancy  in  the  position  of
30    chairperson, the Governor shall have 30 days from the date of
31    the  vacancy  to  appoint a new chairperson.  If the Governor
32    does not appoint  a  new  chairperson  within  30  days,  the
33    Council shall convene and elect a new chairperson by a simple
34    majority vote.
 
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 1        The  first meeting of the Council shall be held within 65
 2    days after the effective date of  this  Act.     The  Council
 3    shall  meet quarterly and may hold other meetings on the call
 4    of the chairperson.   Meetings may be held in  person  or  by
 5    conference  telephone  call. Six members constitute a quorum.
 6    The Council may adopt rules it deems necessary to govern  its
 7    procedures.  The  Department  and the Department of Financial
 8    Institutions shall cooperate with the Council to fulfill  the
 9    purposes  of  this  Act  and  shall  provide the Council with
10    dedicated staff and administrative support necessary for  the
11    Council  to perform its duties under this Act. The Department
12    may apply for grants from the public and private sectors  and
13    is authorized to accept grants, gifts, and donations.

14        Section  20.  Duties  and responsibilities of the Council
15    and the Department.
16        (a)  With the advice and assistance of the  Council,  the
17    Department shall promote micro-enterprise and self-employment
18    as   alternatives   to  welfare  and  traditional  wage-labor
19    employment throughout Illinois.
20        (b) The Council shall conduct hearings, as necessary, and
21    issue an annual report to the Department, the  Governor,  and
22    the General Assembly regarding the status of micro-enterprise
23    within  Illinois.   In  that regard, the Council shall review
24    the following:
25             (1)  The number of micro-enterprises in Illinois and
26        their prospects for business success.
27             (2)  The  availability   of   technical   assistance
28        services   and   other   programs   and   incentives  for
29        micro-enterprise in Illinois,  including  entrepreneurial
30        training,  legal services, business incubators, insurance
31        and risk-sharing pools, and other business assistance.
32             (3) The availability and sources of  microcredit  in
33        Illinois.
 
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 1             (4)  Barriers  to  the  success of micro-enterprises
 2        operating  in  Illinois  and  disincentives  to   persons
 3        seeking   self-employment   as   a  means  of  earning  a
 4        livelihood.
 5        (c)  The Council shall recommend to the  Department,  the
 6    Governor,  and  the General Assembly, on an annual basis, all
 7    of the following:
 8             (1)  New  initiatives  to   advocate   and   promote
 9        micro-enterprise  and  self-employment as alternatives to
10        welfare and traditional wage-labor employment.
11             (2)  Programs and incentives to coordinate and  fund
12        more  efficiently the technical support services required
13        by  micro-enterprises  in  Illinois,  including  business
14        training,  small  business  incubators,  legal  services,
15        insurance and  risk-sharing  pools,  communications,  and
16        information technology.
17             (3)  Ways  to  assist  SNBL's  and  to encourage the
18        availability of microcredit to micro-enterprises  and  to
19        other small businesses that may have difficulty obtaining
20        business  credit  as  a  consequence  of  changes  in the
21        financial services industry.
22             (4)  Better  coordination  of  public  and   private
23        sector  programs  and  initiatives  intended  to help and
24        promote self-employment and very small businesses.
25             (5)  Changes in State and local laws  and  practices
26        that  disproportionately burden micro-enterprises or that
27        discourage   persons   from   seeking    self-employment,
28        including  without  limitation  changes in welfare rules,
29        licensing and  permitting  requirements,  tax  laws,  and
30        procurement practices.
31        (d)  The  Department,  with  the advice and assistance of
32    the Council, shall solicit and  apply  for  grants,  matching
33    funds,  and  other  moneys from public and private sources in
34    order to promote micro-enterprise and microcredit in Illinois
 
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 1    and to fund the Council's activities.
 2        (e)  The Council  shall  perform  the  other  duties  and
 3    discharge  the  other  responsibilities  conferred upon it by
 4    this Act.
 5        (f)  The Department may hold  hearings,  take  testimony,
 6    and request information from State agencies.

 7        Section 25.  Interactive Micro-Enterprise Resource Guide.
 8    The  Department,  with  the  advice  and  assistance  of  the
 9    Council, shall create and maintain an Internet-based resource
10    guide   for  Illinois  micro-enterprises,  small  businesses,
11    SNBL's,  financial  institutions,  and  technical  assistance
12    providers.   The guide shall provide an up-to-date listing of
13    all programs, counseling  services,  tax  incentives,  loans,
14    grants,   procurement  opportunities,  and  other  assistance
15    offered by any agency of federal, State, or local  government
16    that  is  targeted primarily to benefit self-employed persons
17    and other small business ventures located in  any  particular
18    location  within  Illinois.  Every  State  agency and unit of
19    local  government  shall  cooperate  with  the   Council   in
20    assembling,  reporting, and updating, not less than quarterly
21    in a format specified by the Council, information  concerning
22    all  programs  administered  or  sponsored  by that agency or
23    local governmental unit. The Department, in cooperation  with
24    the  Council,  shall  establish  reporting  regulations  that
25    minimize  the burden of compliance on reporting entities. The
26    Department shall provide the necessary staff,  administrative
27    support,  and Internet access in order to create and maintain
28    the guide. The Department may impose user fees on some or all
29    users of the guide to the extent that the Department and  the
30    Council believe that fees are advisable.

31        Section  30.  Illinois Microcredit Study. The Department,
32    with the  advice  and  assistance  of  the  Council  and  the
 
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 1    Department   of   Financial   Institutions,   shall  conduct,
 2    complete,  and  deliver  to  the  Governor  and  the  General
 3    Assembly within 24 months following  the  effective  date  of
 4    this  Act a study of microcredit in Illinois. The study shall
 5    include but not be limited to the following factors:
 6        (1)  Assessing  the  availability  of,  demand  for,  and
 7    potential for promoting business development  of  microcredit
 8    in Illinois.
 9        (2)  Investigating the effects of trends in the financial
10    services  industry on the ability of very small businesses in
11    Illinois to access business credit.
12        (3)  Identifying cost-effective  ways  of  promoting  the
13    availability  of  microcredit  in Illinois, which may include
14    State-sponsored loan programs, guarantees, secondary  markets
15    for microcredit loans, and statewide coordination of existing
16    microcredit programs.
17        (4)  Identifying  successful  microcredit  practices  and
18    recommending  guidelines  for  SNBL's  and other providers of
19    microcredit  in  Illinois.  The   Department   of   Financial
20    Institutions  shall  provide  the  Department and the Council
21    with necessary staff and administrative support in  order  to
22    conduct, compile, and publish the study.

23        Section  95.  Repeal.  This  Act is repealed December 31,
24    2004.

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

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