State of Illinois
2023 and 2024


Introduced 2/2/2024, by Sen. David Koehler


New Act
30 ILCS 105/5.1015 new

    Creates the Local Food Infrastructure Grant Act. Requires the Department of Agriculture to develop and administer a Local Food Infrastructure Grant Program to enhance local food processing, aggregation, and distribution within the State through the award of annual grants. Specifies that eligible grant applicants include certain entities that store, process, package, aggregate, or distribute farm products raised in Illinois. Provides that grant awards shall be between $1,000 and $150,000. Describes match requirements for grant recipients. Describes allowable expenses. Requires the Department to create an independent Steering Committee to guide the implementation and evaluation of the grant program. Describes the Steering Committee's composition and responsibilities. Establishes various grant application requirements. Requires the Director of Agriculture to report certain information to the Governor and General Assembly each year. Limits the liability of program administrators. Contains provisions concerning termination of a grant agreement under the Act. Defines terms. Effective immediately.

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1    AN ACT concerning agriculture.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Local
5Food Infrastructure Grant Act.
6    Section 5. Definitions. In this Act:
7    "Department" means the Department of Agriculture.
8    "Director" means the Director of Agriculture.
9    "Fund" means the Local Food Infrastructure Grant Fund.
10    "Grantee" means the person or entity to whom a grant is
11made from the Fund.
12    "Lender" means a federal or State chartered bank, a
13federal land bank, a production credit association, a bank for
14cooperatives, a federal or State chartered savings and loan
15association, a federal or State chartered building and loan
16association, a small business investment company, or any other
17institution qualified within this State to originate and
18service loans, including, but not limited to, an insurance
19company, a credit union, and a mortgage loan company. "Lender"
20includes a wholly owned subsidiary of a manufacturer, seller,
21or distributor of goods or services that makes loans to
22businesses or individuals, commonly known as a captive finance



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1    "Liability" includes, but is not limited to, accounts
2payable; notes or other indebtedness owed to any source;
3taxes; rent; amounts owed on real estate contracts or real
4estate mortgages; judgments; accrued interest payable; and any
5other liability.
6    "State" means the State of Illinois.
7    "Underserved Farmer" means a farmer or rancher who meets
8the United States Department of Agriculture criteria to be
9designated as a beginning farmer, socially disadvantaged
10farmer, veteran farmer, or limited resource farmer.
11    "Underserved community" means a community that has limited
12or no access to resources or that is otherwise disenfranchised
13as determined by the Department. These communities may include
14people who are socioeconomically disadvantaged; people with
15limited English proficiency; geographically isolated or
16educationally disenfranchised people; people of color as well
17as those of ethnic and national origin minorities; women and
18children; individuals with disabilities and others with access
19and functional needs; and seniors.
20    "Value-added agricultural product" means any farm or
21agricultural product or by-product that has its value enhanced
22through processing in Illinois, packaging in Illinois, or any
23other activity in Illinois.
24    Section 10. Findings.
25    (a) The General Assembly finds that the following



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1conditions exist in this State:
2        (1) Small fruit, vegetable, and livestock farmers are
3    vital to the health and wealth of Illinois communities,
4    yet Illinois does not currently have infrastructure in
5    place to support local food farmers or to feed Illinois
6    communities.
7        (2) An estimated 95% of the food consumed in Illinois
8    is purchased from outside of our borders, resulting in the
9    export of billions of food dollars outside our State
10    rather than the enhancement of our local food economies.
11        (3) A shift of just 10% toward local food purchasing
12    by Illinois individuals, families, schools, institutions,
13    and State agencies could generate billions in economic
14    growth for our State.
15        (4) For Illinois families, businesses, schools, and
16    institutions to shift their purchasing practices, Illinois
17    must invest in supporting critical local food
18    infrastructure needed to bolster production, aggregation,
19    and distribution of local food.
20    (b) The General Assembly determines and declares that
21there exist conditions in the State that require the
22Department to issue grants on behalf of the State for the
23development of local food processing, aggregation, and
25    Section 15. Local Food Infrastructure Grant Program.



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1Subject to appropriation, the Department shall develop and
2administer a Local Food Infrastructure Grant Program to
3enhance local food processing, aggregation, and distribution
4within the State through the award of annual grants.
5        (1) Eligible grant applicants include any one or more
6    of the following entities that store, process, package,
7    aggregate, or distribute farm products raised in Illinois
8    or plan to do so:
9            (A) Illinois farms with less than 50 employees;
10            (B) Illinois cooperatives with less than 50
11        employees;
12            (C) Illinois processing facilities with less than
13        50 employees;
14            (D) Illinois food businesses with less than 50
15        employees;
16            (E) Illinois food hubs with less than 50
17        employees;
18            (D) Illinois nonprofit organizations; and
19            (E) units of local government in Illinois.
20        Grant proposals may be submitted by individuals,
21    groups, partnerships, or collaborations.
22        (2) Grant awards shall be between $1,000 and $150,000.
23        (3) The recipient of a grant under this Section must
24    provide a portion of the total project costs. Of the
25    funded projects, 80% will be required to provide a 50%
26    match. The remaining 20% of funded projects will be



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1    categorized as "high need" and will be required to provide
2    a match of up to 20%. The recipient's match may be in cash,
3    cash-equivalent investments, bonds, irrevocable letters of
4    credit, or any combination of those matching fund sources.
5    Acceptable sources of matching funds include, but are not
6    limited to, commercial and private lenders, leasing
7    companies, and grants.
8        (4) All grant funding must be used for purchasing,
9    leasing to own, renting, building, or installing
10    infrastructure that will increase market access of
11    Illinois communities to Illinois agricultural products.
12    Allowable expenses include, but are not limited to:
13            (A) equipment used in the production of
14        value-added agricultural products;
15            (B) milling or pressing equipment;
16            (C) creamery or milk product processing and
17        packaging equipment;
18            (D) food hub development or expansion;
19            (E) cooler walls and refrigeration units;
20            (F) grading, packing, labeling, packaging, or
21        sorting equipment;
22            (G) refrigerated trucks;
23            (H) custom exempt mobile slaughter units and
24    livestock processing equipment;
        (I) agroforestry processing equipment; and
26            (J) local fish and shrimp processing.



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1        Grant funding may not be used for labor, marketing, or
2    promotion.
3        (5) The Local Food Infrastructure Grant Fund is
4    created as a special fund in the State treasury.
5    Appropriations and moneys from any public or private
6    source may be deposited into the Fund. The Fund shall be
7    used for the purposes of this Act. Repayments of grants
8    made under this Section shall be deposited into the Fund.
9    A maximum of 10% of all funds appropriated through this
10    Fund may be awarded to the Department for administrative
11    costs.
12    Section 20. Steering Committee.
13    (a) The Department shall create an independent Local Food
14Infrastructure Steering Committee to guide the implementation
15and evaluation of the grant program created by this Act. The
16Steering Committee shall be selected by the Director, and it
17shall be composed of, at a minimum, the following members: at
18least 3 farmers, including one specialty crop farmer, one
19livestock farmer, and one farmer of color; one representative
20from the local food processing industry; one representative
21from a nonprofit organization serving farmers of color; one
22representative from a nonprofit organization serving farmers
23at large; and one representative from the Department.
24    (b) The Steering Committee's responsibilities shall



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1        (1) determining the grant funding cycle;
2        (2) determining application requirements and terms of
3    the grant agreement;
4        (3) determining grant criteria and preferences in
5    addition to those specified in this Act;
6        (4) grant review and selection;
7        (5) determining project reporting requirements for
8    funded projects; and
9        (6) evaluating program success and adjusting criteria,
10    requirements, preferences, implementation, and all other
11    elements of the grant as needed to ensure the grant
12    program meets its intended purpose, so long as changes are
13    in compliance with this Act.
14    (c) Grant applications must be made on forms provided by
15the Department and in accordance with procedures established
16by the Steering Committee. At a minimum, an applicant must be
17an Illinois resident, as defined by Department rule, and must
18provide the names, addresses, and occupations of all project
19owners, the project address, relevant credit and financial
20information (including, but not limited to, assets and
21liabilities), and any other information deemed necessary by
22the Steering Committee for review of the grant application.
23        (1) All requests for the waiver of any requirements in
24    this Section must be made in writing to the Department. A
25    grant award is subject to modification or alteration under
26    the following conditions:



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1            (A) The grant award is subject to any
2        modifications that may be required by changes in State
3        law or rules. The Department shall notify the
4        recipient in writing of any amendment to the law and
5        rules and the effective date of those amendments.
6            (B) If either the Department or the recipient
7        requests to modify the terms of the grant award,
8        written notice of the proposed modification shall be
9        given to the other party. No modification shall take
10        effect unless agreed to in writing by both the
11        Department and the recipient.
12    (d) The Steering Committee, in reviewing the applications,
13must consider, but is not limited to considering, the
14following criteria:
15        (1) whether the project has a reasonable assurance of
16    increasing the availability and accessibility of Illinois
17    agricultural products among Illinois communities;
18        (2) whether there is an adequate and realistic budget
19    projection; and
20        (3) whether the application meets the eligibility
21    requirements and the project costs are eligible under this
22    Act.
23    (e) Preference for grants shall be given to the following:
24        (1) proposals that have established favorable
25    community support;
26        (2) proposals that have a positive economic impact on



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1    the State's local food sector;
2        (3) proposals that increase the availability of
3    Illinois agricultural products to underserved communities
4    in Illinois;
5        (4) proposals that positively impact underserved
6    farmers in Illinois;
7        (5) proposals from established farmers and food
8    businesses; and
9        (6) proposals that facilitate long-term economic
10    development in the local food sector.
11    (f) The Steering Committee shall select all applications
12for funding and, from this selection, shall categorize 20% of
13the applications as "high need" projects that are eligible for
14a lower match requirement of 0% to 25%. To qualify as a
15high-need project, the Steering Committee shall consider, but
16is not limited to considering, the following criteria:
17        (1) whether the proposal is submitted by an
18    underserved farmer;
19        (2) whether the proposal will positively impact
20    underserved communities; and
21        (3) whether the proposal is submitted by a small or
22    very small farm or a small or very small food business.
23    Section 25. Report. The Director must file with the
24Governor and General Assembly and publish publicly by March 1
25of each year a written report detailing the impact of the Local



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1Food Infrastructure Grant for the previous calendar year. The
2report must include:
3        (1) a complete list of all applications for grants
4    under the Local Food Infrastructure Grant Program during
5    the previous calendar year;
6        (2) a complete list of all persons that were awarded
7    the Local Food Infrastructure Grant and the nature and
8    amount of their awards in the previous calendar year; and
9        (3) a statement of the economic impact of the grant
10    from the previous calendar year, which may include jobs
11    created, local food sales increased, and communities
12    served.
13    Section 30. Liability. The Director, the Local Food
14Infrastructure Steering Committee, Department employees, and
15any persons authorized to execute grants are not personally
16liable on account of the grants made under this Act and are not
17subject to any personal liability or accountability by reason
18of the issuance of the grants.
19    Section 35. Default or termination of grant agreement.
20    (a) If the recipient of a grant violates any of the terms
21of the grant agreement, the Department shall send a written
22notice to the recipient that the recipient is in default, and
23the recipient shall be given the opportunity to correct the



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1    (b) If the violation is not corrected within 30 days after
2receipt of the notification, the Director may take any one or
3more of the following actions:
4        (1) The Director declare due and payable the amount of
5    the grant, or any portion of it, and cease additional
6    grant payments not yet made to the grant recipient.
7        (2) The Director may take any other action considered
8    appropriate to protect the interest of the project.
9    (c) The Department may determine that a recipient has
10failed to faithfully perform the terms and conditions of the
11scope of work of the project when:
12        (1) The Department has notified the recipient in
13    writing of the existence of circumstances such as
14    misapplication of grant funds, failure to match Department
15    funds, evidence of fraud and abuse, repeated failure to
16    meet performance timelines or standards, or failure to
17    resolve negotiated points of the agreement.
18        (2) The recipient fails to develop and implement a
19    corrective action plan within 30 calendar days of the
20    Department's notice.
21    (d) A grant may be terminated as provided in this
23        (1) If there is no appropriation for the grant program
24    for a specific year, all grants for that year will be
25    terminated in full. If there is an insufficient
26    appropriation for the grant program for a specific year,



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1    the Department may make proportionate cuts to all
2    recipients.
3        (2) If the Department determines that the recipient
4    has failed to comply with the terms and conditions of the
5    grant agreement, the Department may terminate the grant in
6    whole, or in part, at any time before the date of
7    completion.
8        (3) If the Department determines that the continuation
9    of the project would not produce beneficial results
10    commensurate with the further expenditure of funds, the
11    Department may terminate the grant in whole, or in part,
12    at any time before the date of completion.
13        (4) If the recipient refuses or elects not to complete
14    the grant agreement and terminate the grant, the recipient
15    shall notify the Department within 10 days after the date
16    upon which performance ceases. Upon receipt of the
17    notification, the grant shall be declared terminated, and
18    the Department may declare due and payable the amount of
19    the grant and may cease additional grant payments not yet
20    made to the grantee.
21    (e) Any money collected from the default or termination of
22a grant shall be placed into the Fund and expended for the
23purposes of this Act.
24    Section 40. Construction. This Act is necessary for the
25welfare of this State and must be liberally construed to



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1effectuate its purposes. The Department may adopt rules that
2are consistent with and necessary for the implementation and
3administration of this Act.
4    Section 45. The State Finance Act is amended by adding
5Section 5.1015 as follows:
6    (30 ILCS 105/5.1015 new)
7    Sec. 5.1015. The Local Food Infrastructure Grant Fund.
8    Section 99. Effective date. This Act takes effect upon
9becoming law.