Illinois General Assembly - Full Text of SB2562
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Full Text of SB2562  103rd General Assembly

SB2562 103RD GENERAL ASSEMBLY

  
  

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2562

 

Introduced 4/18/2023, by Sen. Willie Preston

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3105/21 new
30 ILCS 105/8s new
605 ILCS 10/40 new

    Amends the Capital Development Board Act and the Toll Highway Act. Provides that the Capital Development Board and the Illinois Highway Toll Authority may make low-interest loans from the Working Capital Revolving Loan Fund to disadvantaged business enterprises or minority-owned businesses. Establishes a loan selection committee to review applications and select eligible businesses. Provides that the Board and Authority may set eligibility requirements for loans by administrative rule. Provides that loans shall not be used for: (1)the refinancing or payment of existing long-term debt; (2) the payment of non-current taxes; (3) the payment, advance, or loan to a stockholder, officer, director, partner, or member owner of a limited liability company; or (4) the purchase or lease of non-construction motor vehicles or equipment. Provides that loans may be made with interest. Limits the number of loans a business may receive. Provides that the Board and Authority shall give annual reports to the Governor and the General Assembly on the program. Provides that the authority to issue loans expires on June 1, 2028. Amends the State Finance Act. Establishes the Working Capital Revolving Loan Fund. Provides that transfers shall not exceed $20,000,000 a year, for a period of 5 years, from the Road Fund to the Working Capital Revolving Loan Fund as requested by the Commissioner of the Board or the Director of the Authority. Provides that no transfer will occur if the available balance in the Working Capital Revolving Loan Fund is equal to or greater than $40,000,000.


LRB103 31695 MXP 60231 b

 

 

A BILL FOR

 

SB2562LRB103 31695 MXP 60231 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Capital Development Board Act is amended by
5adding Section 21 as follows:
 
6    (20 ILCS 3105/21 new)
7    Sec. 21. Disadvantaged business revolving loan and grant
8program.
9    (a) As used in this Section is to provide for assistance to
10disadvantaged business enterprises and minority-owned
11businesses with project financing costs for those firms that
12are ready, willing, and able to participate on Board
13construction contracts. The Board's disparity study recommends
14and supports a financing program to address this barrier faced
15by disadvantaged business enterprises and minority-owned
16businesses.
17    (b) As used in this Section:
18    "Construction" means building, altering, repairing,
19improving, or demolishing any public structure or building, or
20making improvements of any kind to public real property.
21"Construction" does not include the routine operation, routine
22repair, or routine maintenance of existing structures,
23buildings, or real property.

 

 

SB2562- 2 -LRB103 31695 MXP 60231 b

1    "Construction-related services" includes construction
2design, layout, inspection, support, feasibility or location
3study, research, development, planning, or other investigative
4study undertaken by a construction agency concerning
5construction or potential construction.
6    "Disadvantaged business enterprise" has the meaning given
7to that term in 49 CFR Part 26.
8    "Escrow account" means a fiduciary account established
9with:
10        (1) a banking corporation which is both organized
11    under the Illinois Banking Act and authorized to accept
12    and administer trusts in this State; or
13        (2) a national banking association that has its
14    principal place of business in this State and that is
15    authorized to accept and administer trusts in this State.
16    "Fund Control Agent" means a person who provides
17managerial and technical assistance to disadvantaged business
18enterprises or minority-owned businesses and holds the
19authority to manage a loan under this Section. The Fund
20Control Agent will be procured by the Board under a request for
21proposal process governed by the Illinois Procurement Code and
22rules adopted under that Code.
23    "Loan" or "loan assistance funds" means a low-interest
24line of credit made available to a selected disadvantaged
25business enterprise or minority-owned business under this
26program for the purposes set forth in subsection (f).

 

 

SB2562- 3 -LRB103 31695 MXP 60231 b

1    "Minority-owned business" means a business which is at
2least 51% owned by one or more minority persons, or in the case
3of a corporation, at least 51% of the stock in which is owned
4by one or more minority persons; and the management and daily
5business operations of which are controlled by one or more of
6the minority individuals who own it, as defined by Section 2 of
7the Business Enterprise for Minorities, Women, and Persons
8with Disabilities Act.
9    (c) The Board may enter into agreements to make loans to
10disadvantaged business enterprises or minority-owned
11businesses certified by the Board for participation on
12Board-procured construction and construction-related
13contracts.
14    The Board shall establish a loan selection committee to
15review applications and select eligible disadvantaged business
16enterprises or minority-owned businesses for low-interest
17loans under this program. A selection committee shall be
18comprised of at least 3 members appointed by the Commissioner
19of the Board and shall include at least one public member from
20the construction or financing industry. The public member may
21not be employed or associated with any disadvantaged business
22enterprise or minority-owned business holding a contract with
23the Board nor may the public member's firm be considered for a
24contract with the Board while he or she is serving as a public
25member of the committee. Terms of service for public members
26shall not exceed 5 years. No public member of the loan

 

 

SB2562- 4 -LRB103 31695 MXP 60231 b

1selection committee shall hold consecutive terms, nor shall
2any member receive any compensation other than for reasonable
3expenses for service related to this committee.
4    The Board shall establish through administrative rules the
5requirements for eligibility and criteria for loan
6applications, approved use of funds, amount of loans, interest
7rates, collateral, and terms. The Board is authorized to adopt
8rules to implement this Section.
9    The Board shall notify the prime contractor on a project
10that a subcontractor on the same project has been awarded a
11loan from the Working Capital Revolving Loan Fund. If the loan
12agreement is amended by the parties of the loan agreement, the
13prime contractor shall not be a party to any disadvantaged
14business enterprise or minority-owned business loan agreement
15between the Board and participating subcontractor and shall
16not incur any liability for loan debt accrued as a result of
17the loan agreement.
18    (d) Loan funds shall be disbursed to the escrow account,
19subject to appropriation, from the Working Capital Revolving
20Loan Fund established as a special fund in the State treasury.
21Loaned funds that are repaid to the Board shall be deposited
22into the Working Capital Revolving Loan Fund. Other
23appropriations, grants, awards, and donations to the Board for
24the purpose of the revolving loan program established by this
25Section shall be deposited into the Working Capital Revolving
26Loan Fund.

 

 

SB2562- 5 -LRB103 31695 MXP 60231 b

1    (e) A funds control process shall be established to serve
2as an intermediary between the Board and the contractor to
3verify payments and to ensure paperwork is properly filed. The
4Fund Control Agent and contractor shall enter into an
5agreement regarding the control and disbursement of all
6payments to be made by the Fund Control Agent under the
7contract. The Board shall authorize and direct the Fund
8Control Agent to review all disbursement requests and
9supporting documents received from the contractor. The Fund
10Control Agent shall direct the escrow account to disburse
11escrow funds to the subcontractor, material supplier, and
12other appropriate entities by written request for the
13disbursement. The disadvantaged business enterprise or
14minority-owned business shall maintain control over its
15business operations by directing the payments of the loan
16funds through its relationship with the Funds Control Agent.
17The funds control process shall require the Fund Control Agent
18to intercept payments made from a contractor to a
19subcontractor receiving a loan made under this Act and allow
20the Fund Control Agent to deduct any unpaid loan repayments
21owed to the State before releasing the payment to the
22subcontractor.
23    (f) Loan assistance funds shall be allowed for current
24liabilities or working capital expenses associated with
25participation in the performance of contracts procured and
26awarded by the Board for transportation construction and

 

 

SB2562- 6 -LRB103 31695 MXP 60231 b

1construction-related purposes. Loan funds shall not be used
2for:
3        (1) the refinancing or payment of existing long-term
4    debt;
5        (2) the payment of non-current taxes;
6        (3) the payment, advance, or loan to a stockholder,
7    officer, director, partner, or member owner of a limited
8    liability company; or
9        (4) the purchase or lease of non-construction motor
10    vehicles or equipment.
11    The loan agreement shall provide for the terms and
12conditions of repayment which shall not extend repayment
13longer than final payment made by the Board following
14completion and acceptance of the work authorized for loan
15assistance under the program. The funds shall be loaned with
16interest.
17    (g) The number of loans one disadvantaged business
18enterprise or minority-owned business may receive under this
19program is limited to 3. Loans shall not be granted
20simultaneously. An applicant shall not be permitted to obtain
21a loan under this program for a different and additional
22project until payment in full of any outstanding loans granted
23under this program has been received by the Board.
24    (h) The rate of interest for any loan shall be set by rule.
25    (i) The loan amount to any successful applicant shall not
26exceed 55% of the contract or subcontract supporting the loan.

 

 

SB2562- 7 -LRB103 31695 MXP 60231 b

1    (j) Nothing in this Section shall impair the contractual
2rights of the Board and the prime contractor or the
3contractual rights between a prime contractor and
4subcontractor.
5    (k) Nothing in this Section is intended nor shall be
6construed to vest applicants denied funds by the Board in
7accordance with this Section a right to challenge, protest, or
8contest the awarding of funds by the Board to successful
9applicants or any loan or agreement executed in connection
10with it.
11    (l) The debt delinquency prohibition under Section 50-11
12of the Illinois Procurement Code applies to any future
13contracts or subcontracts in the event of a loan default.
14    (m) Investment income which is attributable to the
15investment of moneys in the Working Capital Revolving Loan
16Fund shall be retained in the Working Capital Revolving Loan
17Fund.
18    (n) By January 1, 2024 and January 1 of each succeeding
19year, the Board shall report to the Governor and the General
20Assembly on the utilization and status of the revolving loan
21program. The report shall, at a minimum, include the amount
22transferred from the Road Fund to the Working Capital
23Revolving Loan Fund, the number and size of approved loans,
24the amounts disbursed to and from the escrow account, the
25amounts, if any, repaid to the Working Capital Revolving Loan
26Fund, the interest and fees paid by loan recipients, and the

 

 

SB2562- 8 -LRB103 31695 MXP 60231 b

1interest earned on balances in the Working Capital Revolving
2Loan Fund, and the names of any contractors who are delinquent
3or in default of payment. The January 1, 2027 report shall
4include an evaluation of the program by the Board to determine
5the program's viability and progress towards its stated
6purpose.
7    (o) The authorization to execute additional loans or
8request transfers to the Working Capital Revolving Loan Fund
9expires on June 1, 2028. The Comptroller shall order
10transferred and the Treasurer shall transfer any available
11balance remaining in the Working Capital Revolving Loan Fund
12to the Road Fund on January 1, 2029, or as soon thereafter as
13may be practical. Any loan repayments, interest, or fees that
14are by the terms of a loan agreement payable to the Working
15Capital Revolving Loan Fund after June 20, 2028 shall instead
16be paid into the Road Fund as the successor fund to the Working
17Capital Revolving Loan Fund.
 
18    Section 10. The State Finance Act is amended by adding
19Section 8s as follows:
 
20    (30 ILCS 105/8s new)
21    Sec. 8s. Transfer to the Working Capital Revolving Loan
22Fund.
23    (a) The Working Capital Revolving Loan Fund is created as
24a special fund in the State treasury.

 

 

SB2562- 9 -LRB103 31695 MXP 60231 b

1    (b) Except as provided in subsection (c), upon the written
2request of the Commissioner of the Capital Development Board
3or the Director of the Illinois Highway Toll Authority, the
4State Comptroller shall order transferred and the State
5Treasurer shall transfer amounts not to exceed $20,000,000 in
6aggregate during a fiscal year, for a period of 5 years, from
7the Road Fund to the Working Capital Revolving Loan Fund as
8requested by the Commissioner of the Board or the Director of
9the Authority or as soon thereafter as may be practical.
10    (c) No transfer may be requested or ordered if the
11available balance in the Working Capital Revolving Loan Fund
12is equal to or greater than $40,000,000.
 
13    Section 15. The Toll Highway Act is amended by adding
14Section 40 as follows:
 
15    (605 ILCS 10/40 new)
16    Sec. 40. Disadvantaged business revolving loan and grant
17program.
18    (a) The purpose of this Section is to provide for
19assistance to disadvantaged business enterprises or
20minority-owned businesses with project financing costs for
21those firms that are ready, willing, and able to participate
22on Authority construction contracts. The Authority's disparity
23study recommends and supports a financing program to address
24this barrier faced by disadvantaged business enterprises or

 

 

SB2562- 10 -LRB103 31695 MXP 60231 b

1minority-owned businesses.
2    (b) As used in this Section:
3    "Construction" means building, altering, repairing,
4improving, or demolishing any public structure or building, or
5making improvements of any kind to public real property.
6"Construction" does not include the routine operation, routine
7repair, or routine maintenance of existing structures,
8buildings, or real property.
9    "Construction-related services" includes construction
10design, layout, inspection, support, feasibility or location
11study, research, development, planning, or other investigative
12study undertaken by a construction agency concerning
13construction or potential construction.
14    "Disadvantaged business enterprise" has the meaning given
15to that term in 49 CFR Part 26.
16    "Escrow account" means a fiduciary account established
17with:
18        (1) a banking corporation which is both organized
19    under the Illinois Banking Act and authorized to accept
20    and administer trusts in this State; or
21        (2) a national banking association that has its
22    principal place of business in this State and that is
23    authorized to accept and administer trusts in this State.
24    "Fund Control Agent" means a person who provides
25managerial and technical assistance to disadvantaged business
26enterprises or minority-owned businesses and holds the

 

 

SB2562- 11 -LRB103 31695 MXP 60231 b

1authority to manage a loan under this Section. The Fund
2Control Agent will be procured by the Authority under a
3request for proposal process governed by the Illinois
4Procurement Code and rules adopted under that Code.
5    "Loan" or "loan assistance funds" means a low-interest
6line of credit made available to a selected disadvantaged
7business enterprise or minority-owned business under this
8program for the purposes set forth in subsection (f).
9    "Minority-owned business" means a business which is at
10least 51% owned by one or more minority persons, or in the case
11of a corporation, at least 51% of the stock in which is owned
12by one or more minority persons; and the management and daily
13business operations of which are controlled by one or more of
14the minority individuals who own it, as defined by Section 2 of
15the Business Enterprise for Minorities, Women, and Persons
16with Disabilities Act.
17    (c) The Authority may enter into agreements to make loans
18to disadvantaged business enterprises or minority-owned
19businesses certified by the Authority for participation on
20Authority-procured construction and construction-related
21contracts.
22    The Authority shall establish a loan selection committee
23to review applications and select eligible disadvantaged
24business enterprises or minority-owned businesses for
25low-interest loans under this program. A selection committee
26shall be comprised of at least 3 members appointed by the

 

 

SB2562- 12 -LRB103 31695 MXP 60231 b

1Director of the Authority and shall include at least one
2public member from the construction or financing industry. The
3public member may not be employed or associated with any
4disadvantaged business enterprises or minority-owned business
5holding a contract with the Authority nor may the public
6member's firm be considered for a contract with the Authority
7while he or she is serving as a public member of the committee.
8Terms of service for public members shall not exceed 5 years.
9No public member of the loan selection committee shall hold
10consecutive terms, nor shall any member receive any
11compensation other than for reasonable expenses for service
12related to this committee.
13    The Authority shall establish through administrative rules
14the requirements for eligibility and criteria for loan
15applications, approved use of funds, amount of loans, interest
16rates, collateral, and terms. The Authority is authorized to
17adopt rules to implement this Section.
18    The Authority shall notify the prime contractor on a
19project that a subcontractor on the same project has been
20awarded a loan from the Working Capital Revolving Loan Fund.
21If the loan agreement is amended by the parties of the loan
22agreement, the prime contractor shall not be a party to any
23disadvantaged business enterprise or minority-owned business
24loan agreement between the Authority and participating
25subcontractor and shall not incur any liability for loan debt
26accrued as a result of the loan agreement.

 

 

SB2562- 13 -LRB103 31695 MXP 60231 b

1    (d) Loan funds shall be disbursed to the escrow account,
2subject to appropriation, from the Working Capital Revolving
3Loan Fund established as a special fund in the State treasury.
4Loaned funds that are repaid to the Authority shall be
5deposited into the Working Capital Revolving Loan Fund. Other
6appropriations, grants, awards, and donations to the Authority
7for the purpose of the revolving loan program established by
8this Section shall be deposited into the Working Capital
9Revolving Loan Fund.
10    (e) A funds control process shall be established to serve
11as an intermediary between the Authority and the contractor to
12verify payments and to ensure paperwork is properly filed. The
13Fund Control Agent and contractor shall enter into an
14agreement regarding the control and disbursement of all
15payments to be made by the Fund Control Agent under the
16contract. The Authority shall authorize and direct the Fund
17Control Agent to review all disbursement requests and
18supporting documents received from the contractor. The Fund
19Control Agent shall direct the escrow account to disburse
20escrow funds to the subcontractor, material supplier, and
21other appropriate entities by written request for the
22disbursement. The disadvantaged business enterprise or
23minority-owned business shall maintain control over its
24business operations by directing the payments of the loan
25funds through its relationship with the Funds Control Agent.
26The funds control process shall require the Fund Control Agent

 

 

SB2562- 14 -LRB103 31695 MXP 60231 b

1to intercept payments made from a contractor to a
2subcontractor receiving a loan made under this Act and allow
3the Fund Control Agent to deduct any unpaid loan repayments
4owed to the State before releasing the payment to the
5subcontractor.
6    (f) Loan assistance funds shall be allowed for current
7liabilities or working capital expenses associated with
8participation in the performance of contracts procured and
9awarded by the Authority for transportation construction and
10construction-related purposes. Loan funds shall not be used
11for:
12        (1) the refinancing or payment of existing long-term
13    debt;
14        (2) the payment of non-current taxes;
15        (3) the payment, advance, or loan to a stockholder,
16    officer, director, partner, or member owner of a limited
17    liability company; or
18        (4) the purchase or lease of non-construction motor
19    vehicles or equipment.
20    The loan agreement shall provide for the terms and
21conditions of repayment which shall not extend repayment
22longer than final payment made by the Authority following
23completion and acceptance of the work authorized for loan
24assistance under the program. The funds shall be loaned with
25interest.
26    (g) The number of loans one disadvantaged business

 

 

SB2562- 15 -LRB103 31695 MXP 60231 b

1enterprise or minority-owned business may receive under this
2program is limited to 3. Loans shall not be granted
3simultaneously. An applicant shall not be permitted to obtain
4a loan under this program for a different and additional
5project until payment in full of any outstanding loans granted
6under this program has been received by the Authority.
7    (h) The rate of interest for any loan shall be set by rule.
8    (i) The loan amount to any successful applicant shall not
9exceed 55% of the contract or subcontract supporting the loan.
10    (j) Nothing in this Section shall impair the contractual
11rights of the Authority and the prime contractor or the
12contractual rights between a prime contractor and
13subcontractor.
14    (k) Nothing in this Section is intended nor shall be
15construed to vest applicants denied funds by the Authority in
16accordance with this Section a right to challenge, protest, or
17contest the awarding of funds by the Authority to successful
18applicants or any loan or agreement executed in connection
19with it.
20    (l) The debt delinquency prohibition under Section 50-11
21of the Illinois Procurement Code applies to any future
22contracts or subcontracts in the event of a loan default.
23    (m) Investment income which is attributable to the
24investment of moneys in the Working Capital Revolving Loan
25Fund shall be retained in the Working Capital Revolving Loan
26Fund.

 

 

SB2562- 16 -LRB103 31695 MXP 60231 b

1    (n) By January 1, 2024 and January 1 of each succeeding
2year, the Authority shall report to the Governor and the
3General Assembly on the utilization and status of the
4revolving loan program. The report shall, at a minimum,
5include the amount transferred from the Road Fund to the
6Working Capital Revolving Loan Fund, the number and size of
7approved loans, the amounts disbursed to and from the escrow
8account, the amounts, if any, repaid to the Working Capital
9Revolving Loan Fund, the interest and fees paid by loan
10recipients, and the interest earned on balances in the Working
11Capital Revolving Loan Fund, and the names of any contractors
12who are delinquent or in default of payment. The January 1,
132027 report shall include an evaluation of the program by the
14Authority to determine the program's viability and progress
15towards its stated purpose.
16    (o) The authorization to execute additional loans or
17request transfers to the Working Capital Revolving Loan Fund
18expires on June 1, 2028. The Comptroller shall order
19transferred and the Treasurer shall transfer any available
20balance remaining in the Working Capital Revolving Loan Fund
21to the Road Fund on January 1, 2029, or as soon thereafter as
22may be practical. Any loan repayments, interest, or fees that
23are by the terms of a loan agreement payable to the Working
24Capital Revolving Loan Fund after June 20, 2028 shall instead
25be paid into the Road Fund as the successor fund to the Working
26Capital Revolving Loan Fund.