Sen. David Koehler

Filed: 3/4/2024





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2    AMENDMENT NO. ______. Amend Senate Bill 3077 by replacing
3everything after the enacting clause with the following:
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    "Grant administrator" means the Department or a nonprofit
11organization that is exempt from taxation under Section
12501(c)(3) of the Internal Revenue Code, that represents
13farmers, and that has entered into a subcontract with the
14Department under Section 15 to administer the grant.
15    "Grantee" means the person or entity to whom a grant is
16made from the Fund.



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1    "Lender" means a federal or State chartered bank, a
2federal land bank, a production credit association, a bank for
3cooperatives, a federal or State chartered savings and loan
4association, a federal or State chartered building and loan
5association, a small business investment company, or any other
6institution qualified within this State to originate and
7service loans, including, but not limited to, an insurance
8company, a credit union, and a mortgage loan company.
9    "Lender" includes a wholly owned subsidiary of a
10manufacturer, seller, or distributor of goods or services that
11makes loans to businesses or individuals, commonly known as a
12captive finance company.
13    "Liability" includes, but is not limited to, accounts
14payable; notes or other indebtedness owed to any source;
15taxes; rent; amounts owed on real estate contracts or real
16estate mortgages; judgments; accrued interest payable; and any
17other liability.
18    "State" means the State of Illinois.
19    "Underserved farmer" means a farmer or rancher who meets
20the United States Department of Agriculture criteria to be
21designated as a beginning farmer, socially disadvantaged
22farmer, veteran farmer, or limited resource farmer.
23    "Underserved community" means a community that has limited
24or no access to resources or that is otherwise disenfranchised
25as determined by the Department. These communities may include
26people who are socioeconomically disadvantaged; people with



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1limited English proficiency; geographically isolated or
2educationally disenfranchised people; people of color as well
3as ethnic and national origin minorities; women and children;
4individuals with disabilities and others with access and
5functional needs; and seniors.
6    "Value-added agricultural product" means any farm or
7agricultural product or by-product that has its value enhanced
8through processing in Illinois, packaging in Illinois, or any
9other activity in Illinois.
10    Section 10. Findings.
11    (a) The General Assembly finds that the following
12conditions exist in this State:
13        (1) Small fruit, vegetable, and livestock farmers are
14    vital to the health and wealth of Illinois communities,
15    yet Illinois does not currently have infrastructure in
16    place to support local food farmers or to feed Illinois
17    communities.
18        (2) An estimated 95% of the food consumed in Illinois
19    is purchased from outside of our borders, resulting in the
20    export of billions of food dollars outside our State
21    rather than the enhancement of our local food economies.
22        (3) A shift of just 10% toward local food purchasing
23    by Illinois individuals, families, schools, institutions,
24    and State agencies could generate billions in economic
25    growth for our State.



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1        (4) For Illinois families, businesses, schools, and
2    institutions to shift their purchasing practices, Illinois
3    must invest in supporting critical local food
4    infrastructure needed to bolster processing, aggregation,
5    and distribution of local food.
6    (b) The General Assembly determines and declares that
7there exist conditions in the State that require the
8Department to issue grants on behalf of the State for the
9development of local food processing, aggregation, and
11    Section 15. Local Food Infrastructure Grant Program.
12Funding appropriated for the Local Food Infrastructure Grant
13Program shall be allocated to the Department. The Department
14may enter into a subcontract agreement with a nonprofit
15organization that is exempt from taxation under Section
16501(c)(3) of the Internal Revenue Code and that represents
17farmers in order to administer the grant program established
18under this Act, so long as the administration of the grant
19program by the grant administrator adheres to the requirements
20of this Act, including the following requirements:
21        (1) Eligible grant applicants shall include any one or
22    more of the following entities that store, process,
23    package, aggregate, or distribute value-added agricultural
24    products or plan to do so:
25            (A) Illinois farms with less than 50 employees;



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1            (B) Illinois cooperatives with less than 50
2        employees;
3            (C) Illinois processing facilities with less than
4        50 employees;
5            (D) Illinois food businesses with less than 50
6        employees;
7            (E) Illinois food hubs with less than 50
8        employees;
9            (F) Illinois nonprofit organizations; and
10            (G) units of local government in Illinois.
11        Grant proposals may be submitted to the grant
12    administrator by individuals, groups, partnerships, or
13    collaborations. A recipient of grant funding under this
14    Act whose project is funded in a grant cycle is not
15    eligible to apply for grant funding under this Act for
16    that project in the next funding cycle nor is any other
17    person eligible to apply for grant funding for that
18    project in the next funding cycle. However, any person may
19    apply for grant funding under this Act for such project in
20    any subsequent funding cycles.
21        (2) Grant awards shall be available for collaborative
22    and individual projects at the following award amounts:
23            (A) for a collaborative project, a grant of $1,000
24        to $250,000 may be awarded; and
25            (B) for an individual project, a grant of $1,000
26        to $75,000 may be awarded.



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1        (3) All funded projects must show comparable
2    investments by the recipient in the development and
3    progression of the project being funded or must show
4    evidence of being a high need project. The recipient's
5    comparable investments may be provided in cash,
6    cash-equivalent investments, bonds, irrevocable letters of
7    credit, time and labor, or any combination of those
8    matching fund sources. Acceptable providers of matching
9    funds include, but are not limited to, commercial,
10    municipal, and private lenders; leasing companies; and
11    grantors of funds. A project may be designated as a high
12    need project if at least one of the following conditions
13    is met:
14            (A) the project can demonstrate that it is filling
15        a gap in critical infrastructure for its region or
16        community that is unlikely to be resolved without the
17        grant investment; or
18            (B) the project can demonstrate that the grant
19        investment will primarily serve underserved farmers or
20        underserved communities.
21        (4) All grant funding provided under this Act must be
22    used for purchasing, leasing to own, renting, building, or
23    installing infrastructure related to the processing,
24    storage, aggregation, or distribution of value-added
25    agricultural products. Allowable expenses include, but are
26    not limited to:



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1            (A) equipment used in the production of
2        value-added agricultural products;
3            (B) milling or pressing equipment;
4            (C) creamery or milk product processing and
5        packaging equipment;
6            (D) food hub development or expansion;
7            (E) cooler walls and refrigeration units;
8            (F) grading, packing, labeling, packaging, or
9        sorting equipment;
10            (G) refrigerated trucks;
11            (H) custom exempt mobile slaughter units and
12        livestock processing equipment;
13            (I) agroforestry processing equipment; and
14            (J) local fish and shrimp processing.
15        Grant funding provided under this Act may not be used
16    for labor, marketing, or promotion or for the costs of
17    production agriculture, such as costs for the purchase of
18    hoop houses, irrigation, or other infrastructure related
19    to starting or increasing agricultural production.
20    Section 17. Local Food Infrastructure Grant Fund. The
21Local Food Infrastructure Grant Fund is created as a special
22fund in the State treasury. Appropriations and moneys from any
23public or private source may be deposited into the Fund. The
24Fund shall be used for the purposes of this Act. Repayments of
25grants made under this Section shall be deposited into the



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1Fund. A maximum of 10% of all funds appropriated through the
2Fund may be used by the Department for the costs of
3administering the grant within the Department or the cost of
4subcontracting a grant administrator.
5    Section 20. Program administration.
6    (a) The grant administrator shall create an independent
7Local Food Infrastructure Steering Committee to guide the
8implementation and evaluation of the grant program created by
9this Act. The Steering Committee shall be composed of, at a
10minimum, the following members: at least 3 farmers, including
11one specialty crop farmer, one livestock farmer, and one
12farmer of color; one representative from the local food
13processing industry; one representative from a nonprofit
14organization serving farmers of color; one representative from
15a nonprofit organization serving farmers at large; and one
16representative from the Illinois Stewardship Alliance Local
17Food Farmer Caucus so long as the Caucus exists.
18    (b) The Steering Committee's responsibilities shall
19include advising the Department and any other grant
20administrator on the following matters:
21        (1) application requirements and terms of grant
22    agreements;
23        (2) grant criteria and preferences, including
24    additional criteria and preferences to be adopted by the
25    Department by rule;



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1        (3) the meaning of the term "collaborative project" to
2    be codified in Department rules;
3        (4) grant review and selection;
4        (5) project reporting requirements for funded
5    projects; and
6        (6) evaluation of program success and adjustment of
7    criteria, requirements, preferences, program
8    implementation, and other elements of the grant program as
9    needed to ensure that the grant program meets its intended
10    purpose and complies with this Act.
11    (c) An applicant for grant funding under this Act must, at
12a minimum, be an Illinois resident, as defined by Department
13rule, and provide the names, addresses, and occupations of all
14project owners, the project address, relevant credit and
15financial information (including, but not limited to, assets
16and liabilities), and any other information deemed necessary
17by the grant administrator for review of the grant
18application. A grant award is subject to modification or
19alteration under the condition that the grant award is subject
20to any modifications that may be required by changes in State
21law or rules. The Department shall provide written notice to
22the recipient or, if subcontracting with another grant
23administrator, the other grant administrator of any amendment
24to the Act or rules adopted under the Act and the effective
25date of those amendments.
26    (d) The grant administrator, in reviewing the



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1applications, must consider, but is not limited to
2considering, the following criteria:
3        (1) whether the project has a reasonable assurance of
4    increasing the availability and accessibility of Illinois
5    agricultural products among Illinois communities;
6        (2) whether there is an adequate and realistic budget
7    projection; and
8        (3) whether the application meets the eligibility
9    requirements and the project costs are eligible under this
10    Act.
11    (e) Preference for grants shall be given to the following
12types of proposals:
13        (1) proposals that have established favorable
14    community support;
15        (2) proposals that increase the availability of
16    Illinois agricultural products to underserved communities
17    in Illinois;
18        (3) proposals that positively impact underserved
19    farmers in Illinois;
20        (4) proposals from established farmers and food
21    businesses;
22        (5) proposals that facilitate long-term economic
23    development in the local food sector;
24        (6) proposals that demonstrate comparable investments
25    by the anticipated recipient;
26        (7) proposals for high need projects; and



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1        (8) proposals that are submitted by small and very
2    small farms and food businesses.
3    Section 25. Report. The grant administrator must annually
4file with the Governor and General Assembly and publish
5publicly each year a written report detailing the impact of
6the Local Food Infrastructure Grant Program for the previous
7calendar year. The report must include:
8        (1) a complete list of all applications for grants
9    under this Act that were received during the previous
10    calendar year;
11        (2) a complete list of all persons that were awarded a
12    grant under this Act in the previous calendar year and the
13    nature and amount of their awards; and
14        (3) a statement of the economic impact of the grants
15    made in the previous calendar year, which may include jobs
16    created, local food sales increased, and communities
17    served.
18    Section 30. Liability. The Director, the grant
19administrator, the Local Food Infrastructure Steering
20Committee, Department employees, and any persons authorized to
21execute grants are not personally liable on account of the
22grants made under this Act and are not subject to any personal
23liability or accountability by reason of the issuance of the



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1    Section 35. Default or termination of grant agreement.
2    (a) If the recipient of a grant violates any of the terms
3of the grant agreement, the grant administrator shall send a
4written notice to the recipient that the recipient is in
5default, and the recipient shall be given the opportunity to
6correct the violations.
7    (b) If the violation is not corrected within 30 days after
8receipt of the notification, the grant administrator may take
9any one or more of the following actions:
10        (1) The grant administrator may declare due and
11    payable the amount of the grant, or any portion of it, and
12    cease additional grant payments not yet made to the grant
13    recipient.
14        (2) The grant administrator may take any other action
15    considered appropriate to protect the interest of the
16    project.
17    (c) The grant administrator may determine that a recipient
18has failed to faithfully perform the terms and conditions of
19the scope of work of the project when:
20        (1) The grant administrator has notified the recipient
21    in writing of the existence of circumstances such as
22    misapplication of grant funds, failure to match grant
23    funds, evidence of fraud and abuse, repeated failure to
24    meet performance timelines or standards, or failure to
25    resolve negotiated points of the agreement.



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1        (2) The recipient fails to develop and implement a
2    corrective action plan within 30 calendar days of the
3    grant administrator's notice.
4    (d) A grant may be terminated as provided in this
6        (1) If there is no appropriation for the grant program
7    for a specific year, all grants for that year will be
8    terminated in full. If there is an insufficient
9    appropriation for the grant program for a specific year,
10    the grant administrator may make proportionate cuts to all
11    recipients.
12        (2) If the grant administrator determines that the
13    recipient has failed to comply with the terms and
14    conditions of the grant agreement, the grant administrator
15    may terminate the grant in whole, or in part, at any time
16    before the date of completion.
17        (3) If the grant administrator determines that the
18    continuation of the project would not produce beneficial
19    results commensurate with the further expenditure of
20    funds, the grant administrator may terminate the grant in
21    whole, or in part, at any time before the date of
22    completion.
23        (4) If the recipient refuses or elects not to complete
24    the grant agreement and terminate the grant, the recipient
25    shall notify the grant administrator within 10 days after
26    the date upon which performance ceases. Upon receipt of



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1    the notification, the grant shall be declared terminated,
2    and the grant administrator may declare due and payable
3    the amount of the grant and may cease additional grant
4    payments not yet made to the grantee.
5    (e) Any money collected from the default or termination of
6a grant shall be placed into the Fund and expended for the
7purposes of this Act.
8    Section 40. Construction. This Act is necessary for the
9welfare of this State and must be liberally construed to
10effectuate its purposes. The Department may adopt rules that
11are consistent with and necessary for the implementation and
12administration of this Act.
13    Section 900. The State Finance Act is amended by adding
14Section 5.1015 as follows:
15    (30 ILCS 105/5.1015 new)
16    Sec. 5.1015. The Local Food Infrastructure Grant Fund.
17    Section 999. Effective date. This Act takes effect upon
18becoming law.".