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91_SB0786eng SB786 Engrossed 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. SB786 Engrossed -2- LRB9100876DHmbB 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 SB786 Engrossed -3- LRB9100876DHmbB 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, and one shall be the 29 Secretary of Human Services or his or her designee. Three 30 members shall be appointed by the Governor. Of the remaining 31 4 members, one shall be appointed by the President of the 32 Senate, one by the Minority Leader of the Senate, one by the 33 Speaker of the House of Representatives, and one by the SB786 Engrossed -4- LRB9100876DHmbB 1 Minority Leader of the House of Representatives. Appointed 2 members shall be uniquely qualified by education, 3 professional knowledge, or experience to serve on the 4 Council. Appointed members shall include operators of 5 micro-enterprises, representatives of SNBL's, financial 6 institutions, technical assistance providers, and other 7 individuals who have been active in assisting 8 micro-enterprises and SNBL's. Appointed members shall 9 reflect the geographic, cultural, and ethnic diversity of 10 this State. 11 Of the initial appointments, members shall be randomly 12 assigned to staggered terms; 4 members shall be appointed for 13 a term of 3 years, 4 members shall be appointed for a term of 14 2 years, and 3 members shall be appointed for a term of one 15 year. Upon the expiration of each member's term, a successor 16 shall be appointed for a term of 3 years. In the case of a 17 vacancy in the office of any member, a successor shall be 18 appointed for the remainder of the unexpired term by the 19 person designated as responsible for making the appointment. 20 No member shall serve more than 3 consecutive terms. Members 21 shall serve without compensation but shall be reimbursed for 22 expenses incurred in connection with the performance of their 23 duties as members. 24 One of the members shall be designated as chairperson by 25 the Governor. If the Governor does not appoint the 26 chairperson within 60 days after the effective date of this 27 Act, the Council shall convene and elect a chairperson by a 28 simple majority vote. Upon a vacancy in the position of 29 chairperson, the Governor shall have 30 days from the date of 30 the vacancy to appoint a new chairperson. If the Governor 31 does not appoint a new chairperson within 30 days, the 32 Council shall convene and elect a new chairperson by a simple 33 majority vote. 34 The first meeting of the Council shall be held within 65 SB786 Engrossed -5- LRB9100876DHmbB 1 days after the effective date of this Act. The Council 2 shall meet quarterly and may hold other meetings on the call 3 of the chairperson. Meetings may be held in person or by 4 conference telephone call. Six members constitute a quorum. 5 The Council may adopt rules it deems necessary to govern its 6 procedures. The Department and the Department of Financial 7 Institutions shall cooperate with the Council to fulfill the 8 purposes of this Act and shall provide the Council with 9 dedicated staff and administrative support necessary for the 10 Council to perform its duties under this Act. The Department 11 may apply for grants from the public and private sectors and 12 is authorized to accept grants, gifts, and donations. 13 Section 20. Duties and responsibilities of the Council 14 and the Department. 15 (a) With the advice and assistance of the Council, the 16 Department shall promote micro-enterprise and self-employment 17 as alternatives to welfare and traditional wage-labor 18 employment throughout Illinois. 19 (b) The Council shall conduct hearings, as necessary, and 20 issue an annual report to the Department, the Governor, and 21 the General Assembly regarding the status of micro-enterprise 22 within Illinois. In that regard, the Council shall review 23 the following: 24 (1) The number of micro-enterprises in Illinois and 25 their prospects for business success. 26 (2) The availability of technical assistance 27 services and other programs and incentives for 28 micro-enterprise in Illinois, including entrepreneurial 29 training, legal services, business incubators, insurance 30 and risk-sharing pools, and other business assistance. 31 (3) The availability and sources of microcredit in 32 Illinois. 33 (4) Barriers to the success of micro-enterprises SB786 Engrossed -6- LRB9100876DHmbB 1 operating in Illinois and disincentives to persons 2 seeking self-employment as a means of earning a 3 livelihood. 4 (c) The Council shall recommend to the Department, the 5 Governor, and the General Assembly, on an annual basis, all 6 of the following: 7 (1) New initiatives to advocate and promote 8 micro-enterprise and self-employment as alternatives to 9 welfare and traditional wage-labor employment. 10 (2) Programs and incentives to coordinate and fund 11 more efficiently the technical support services required 12 by micro-enterprises in Illinois, including business 13 training, small business incubators, legal services, 14 insurance and risk-sharing pools, communications, and 15 information technology. 16 (3) Ways to assist SNBL's and to encourage the 17 availability of microcredit to micro-enterprises and to 18 other small businesses that may have difficulty obtaining 19 business credit as a consequence of changes in the 20 financial services industry. 21 (4) Better coordination of public and private 22 sector programs and initiatives intended to help and 23 promote self-employment and very small businesses. 24 (5) Changes in State and local laws and practices 25 that disproportionately burden micro-enterprises or that 26 discourage persons from seeking self-employment, 27 including without limitation changes in welfare rules, 28 licensing and permitting requirements, tax laws, and 29 procurement practices. 30 (d) The Department, with the advice and assistance of 31 the Council, shall solicit and apply for grants, matching 32 funds, and other moneys from public and private sources in 33 order to promote micro-enterprise and microcredit in Illinois 34 and to fund the Council's activities. SB786 Engrossed -7- LRB9100876DHmbB 1 (e) The Council shall perform the other duties and 2 discharge the other responsibilities conferred upon it by 3 this Act. 4 (f) The Department may hold hearings, take testimony, 5 and request information from State agencies. 6 Section 25. Interactive Micro-Enterprise Resource Guide. 7 The Department, with the advice and assistance of the 8 Council, shall create and maintain an Internet-based resource 9 guide for Illinois micro-enterprises, small businesses, 10 SNBL's, financial institutions, and technical assistance 11 providers. The guide shall provide an up-to-date listing of 12 all programs, counseling services, tax incentives, loans, 13 grants, procurement opportunities, and other assistance 14 offered by any agency of federal, State, or local government 15 that is targeted primarily to benefit self-employed persons 16 and other small business ventures located in any particular 17 location within Illinois. Every State agency and unit of 18 local government shall cooperate with the Council in 19 assembling, reporting, and updating, not less than quarterly 20 in a format specified by the Council, information concerning 21 all programs administered or sponsored by that agency or 22 local governmental unit. The Department, in cooperation with 23 the Council, shall establish reporting regulations that 24 minimize the burden of compliance on reporting entities. The 25 Department shall provide the necessary staff, administrative 26 support, and Internet access in order to create and maintain 27 the guide. The Department may impose user fees on some or all 28 users of the guide to the extent that the Department and the 29 Council believe that fees are advisable. 30 Section 30. Illinois Microcredit Study. The Department, 31 with the advice and assistance of the Council and the 32 Department of Financial Institutions, shall conduct, SB786 Engrossed -8- LRB9100876DHmbB 1 complete, and deliver to the Governor and the General 2 Assembly within 24 months following the effective date of 3 this Act a study of microcredit in Illinois. The study shall 4 include but not be limited to the following factors: 5 (1) Assessing the availability of, demand for, and 6 potential for promoting business development of microcredit 7 in Illinois. 8 (2) Investigating the effects of trends in the financial 9 services industry on the ability of very small businesses in 10 Illinois to access business credit. 11 (3) Identifying cost-effective ways of promoting the 12 availability of microcredit in Illinois, which may include 13 State-sponsored loan programs, guarantees, secondary markets 14 for microcredit loans, and statewide coordination of existing 15 microcredit programs. 16 (4) Identifying successful microcredit practices and 17 recommending guidelines for SNBL's and other providers of 18 microcredit in Illinois. The Department of Financial 19 Institutions shall provide the Department and the Council 20 with necessary staff and administrative support in order to 21 conduct, compile, and publish the study. 22 Section 95. Repeal. This Act is repealed December 31, 23 2004. 24 Section 99. Effective date. This Act takes effect upon 25 becoming law.