HB0574eng 99TH GENERAL ASSEMBLY

HB0574 Engrossed LRB099 04429 JLK 24457 b

AN ACT concerning State government.

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

Section 1. Short title. This Act may be cited as the Illinois Business and Economic Development Corporation Act.

Section 3. Findings. The General Assembly finds that targeted efforts to promote and foster business growth, job creation, and tourism are necessary for economic growth in Illinois to provide more prosperity and opportunities for Illinois residents. As both the public and private sectors have a shared interest in fostering the economic vitality of the State, it is the purpose of this Act to implement economic development policy in the State by means of collaboration between the government and a not-for-profit corporation.

Section 5. Definitions. For the purposes of this Act:

"Board" means the board of directors of the corporation.

"Chief Executive Officer" means the chief executive officer of the corporation.

"Conflict party" means a director, officer, or employee of the corporation; the spouse of a director, officer, or employee of the corporation; or an immediate family member of a director, officer, or employee of the corporation residing in the same residence as the director, officer or employee.

"Corporation" means the Illinois Business and Economic Development Corporation incorporated by the Department pursuant to Section 10.

"Department" means the Illinois Department of Commerce and Economic Opportunity.

"Director" means the Director of Commerce and Economic Opportunity.

Section 10. Creation of the Illinois Business and Economic Development Corporation.

(a) The General Assembly authorizes the Department, in accordance with Section 10 of the State Agency Entity Creation Act, to incorporate the Illinois Business and Economic Development Corporation as a not-for-profit corporation pursuant to the General Not For Profit Corporation Act of 1986.

(b) The purpose of the corporation shall be to operate exclusively for charitable purposes within the government, by promoting the economic development and well-being of the State. The corporation shall focus on business development, small and minority-owned business incubation, trade and investment, tourism and film. The corporation shall:

(1) develop best practices for economic development in consultation with the Department;

(2) enter into grant agreements with the Department and sub-grants with other persons and entities, subject to Department approval;

(3) maintain and develop economic data and research that is beneficial to business development in the State;

(4) maintain and develop information about specific statewide and regional economic incentives and benefits that may be available to a business to expand within, or relocate to, the State; and provide such information to prospective businesses;

(5) formulate and pursue programs and local partnerships for encouraging the location of new businesses in the State and for retaining and fostering the growth of existing businesses;

(6) negotiate tax incentives with private businesses, subject to Department approval; and

(7) cooperate with and provide information to State agencies, local governments, community colleges, and State universities on economic development matters.

(c) For the purposes described in this Act, the corporation shall collaborate with the Department; with other State agencies, authorities, boards, and commissions whose programs and activities significantly affect economic activity in the State as appropriate; and with local and regional economic development organizations, local elected officials, community-based organizations, service delivery providers, and other organizations whose programs and activities significantly affect economic activity. The Department and each other State agency, authority, board, or commission with which the corporation seeks to collaborate shall assist the corporation in carrying out its purposes as directed by the Governor.

(d) The corporation shall make every effort to focus on small business development and incentives and programs designed to assist minority-owned and women-owned businesses and businesses that will create jobs in areas with high unemployment or poverty.

(e) The corporation shall not be considered, in whole or in part, an agency, political subdivision, or instrumentality of the State. The corporation shall not exercise any sovereign power of the State. Employees and officers of the corporation shall not be considered employees or officers of the State or subject to the Personnel Code or other laws applicable to State employees and officers. The corporation does not have authority to pledge the credit of the State; the State shall not be liable for the debts or obligations of the corporation; and all debts and obligations of the corporation shall be payable solely from the corporation's funds.

(f) The corporation shall have such powers, rights, and obligations as are conferred upon a not-for-profit corporation under the General Not For Profit Corporation Act of 1986, including to accept grants, loans, or other amounts from the State, the federal government, or other persons; to enter into contracts; and to employ personnel and other agents.

(g) The corporation shall be established, maintained, and operated so that donations and bequests to the corporation qualify as tax deductible under State income tax laws and Sections 170(c)(2) and 501(c)(3) of the Internal Revenue Code.

(h) The articles of incorporation and bylaws of the corporation shall provide for (1) governance and efficient management of the corporation, (2) a board of directors satisfying the requirements of Section 15, (3) a conflict of interest policy satisfying the requirements of Section 30, and (4) financial operations of the corporation, including the authority to receive and expend funds from public and private sources and to use its property, money, and other resources for the purposes of the corporation.

Section 15. Board of directors and Chief Executive Officer of the corporation.

(a) The affairs of the corporation shall be managed by or under the direction of the board of directors of the corporation.

(b) The board shall comprise 16 directors as follows:

(1) The Governor or his or designee shall be a director ex officio and serve as chairperson of the board.

(2) The Governor shall appoint 11 directors, including (i) one director with professional experience in finance, insurance, or investment banking, (ii) one director with professional experience in small business development, (iii) one director with professional experience in the tourism or hospitality industry, and (iv) eight directors who are actively employed in the private, for-profit sector or who otherwise have substantial experience in economic development. Of those eight directors described in clause (iv), there shall be at least one director from each industry cluster as identified to the Governor by the Director. Of the 11 directors appointed pursuant to this paragraph, at least 6 directors shall be representatives of minority-owned and women-owned businesses.

(3) The Speaker and Minority Leader of the House of Representatives and the President and Minority Leader of the Senate each shall appoint one director who is employed in, or retired from employment in, a private business, not-for-profit organization, or academic organization.

(c) To facilitate communication and cooperation between the corporation and State agencies involved in economic development, the director or head of each of the following agencies shall serve as a non-voting, non-director member of the board: Department of Commerce and Economic Opportunity, Department of Agriculture, Department of Natural Resources, Department of Financial and Professional Regulation, Illinois Finance Authority, Department of Revenue, Department of Labor, Department of Veterans' Affairs, Department of Central Management Services, Illinois Environmental Protection Agency, and Department of Employment Security.

(d) Except for the Governor or his or her designee, each director shall serve a term of three years. The articles of incorporation or bylaws shall divide the other 15 directors into three equal classes, with the terms of one class of directors expiring each year. In the event of a vacancy on the Board, the Governor shall appoint a replacement member within 60 days. In the event of a position appointed by a legislative leader, the leader making the original appointment shall fill the vacancy within 60 days.

(e) The Governor shall select an initial Chief Executive Officer of the corporation, subject to confirmation by a majority of members of the board. After the initial Chief Executive Officer, each subsequent Chief Executive Officer shall be selected and confirmed by a majority vote of the Board.

(f) The members of the board are prohibited from making any contributions to any political committee established to support the Governor or any candidate for Governor.

Section 20. Office of Economic Development and Tourism. Within the Department, there shall be created a new division called the Office of Economic Development and Tourism for the purpose of collaborating with the corporation, issuing grants and transferring funds to the corporation, subject to appropriation, and being responsible for the following functions of the Department: business development; entrepreneurship, innovation, and technology; trade and investment; and tourism and film. The director of that office shall report directly to the Director.

Section 25. Accountability and transparency.

(a) Within the Office of the Director there is created a new division called the Office of Accountability and Transparency. Such division shall be responsible for monitoring all grants made by the Department; for ensuring compliance by the Department and its grantees, including the corporation, with all applicable laws and grant terms and conditions; and for ensuring transparency in the Department's grant-making and other activities.

(b) With respect to any grant agreement entered into between the corporation and the Department, the corporation shall comply with the following provisions:

(1) For the purposes of the Freedom of Information Act, the corporation shall be considered a contractor performing a governmental function on behalf of the Department in accordance with subsection (2) of Section 7 of such Act, whether the corporation receives a grant from or enters into a contract with the Department.

(2) The corporation shall post copies of minutes of its board meetings on its publicly-accessible website. Any redactions shall be limited to information exempt from disclosure pursuant to subsection (1) of Section 7 of the Freedom of Information Act or other applicable law.

(3) The corporation shall post copies of all final grant agreements and tax incentives on its publicly-accessible website within 10 business days of the later of the execution of the final agreement or incentive or the public announcement of the final agreement or incentive. Any redactions shall be limited to information exempt from disclosure pursuant to subsection (1) of Section 7 of the Freedom of Information Act or other applicable law.

(4) The corporation shall develop procedures, standards, and objectives for evaluating all sub-grant applicants and sub-grants awarded to ensure that State funds spent by the corporation and its sub-grantees optimize return on investment for Illinois taxpayers. Such procedures, standards, and objectives shall be disclosed on the corporation's publicly-accessible website.

(5) The corporation shall assess and report its efforts and results to the public and the Department's Office of Accountability and Transparency. In addition, the corporation shall comply with all grant monitoring procedures issued by the Department for the monitoring of grants of State and federal funds.

(6) The corporation shall conduct an annual audit performed by a certified public accountant in accordance with generally accepted accounting principles. Such audit shall be filed with the Department's Office of Accountability and Transparency and made available to the public.

(7) The corporation shall be subject to bi-annual audits by the Auditor General.

(8) The corporation shall submit an annual report by March 31 of each year to the Governor, the General Assembly, and the Department's Office of Accountability and Transparency that describes the corporation's operations and activities during the prior fiscal year, including: (A) the corporation's complete, audited financial statements, including a description of the corporation's financial conditions and operations and a detailed account of how private funds were utilized versus public funds; (B) a listing of all public sources of funds received by the corporation; (C) a listing of all private sources of funds received by the corporation; (D) a listing of all firms and individuals who provided assistance or resources to the corporation without compensation, including the approximate value of the assistance or resources provided; (E) a description of how the operations and activities of the corporation serve the interests of the State and promote economic development; (F) an analysis of the State's return on investment; and (G) a listing of all conflicts of interest from directors, officers, and employees identified in the board meeting minutes.

(9) The corporation shall comply with all applicable State and federal laws, including all applicable terms of the Grant Accountability and Transparency Act. For purposes of the Illinois Grant Funds Recovery Act, all sub-grants of grant funds made by the corporation shall be treated as grant funds in accordance with Section 12 of that Act.

Section 30. Conflicts of interest.

(a) In the conduct of their service to the corporation, directors, officers, and employees of the corporation shall behave ethically and in the best interests of the State and avoid actual and potential conflicts of interest.

(b) The corporation shall adopt and maintain a comprehensive conflicts of interest policy. Such policy shall include, without limitation, the following:

(1) Any pecuniary interest held by or for a conflict party in a grant from or contract with the corporation or a tax incentive from the Department shall be disclosed in writing and identified in the minutes of the board. Such conflict must be disclosed before the approval of any grant, contract, or incentive.

(2) A conflict party who holds a pecuniary interest in a grant from or contract with the corporation or a tax incentive from the Department, or for whom such an interest is held, shall not participate in any corporate action, including deliberations on such action, with respect to such grant, contract, or incentive.

(3) A conflict party may not acquire a pecuniary interest in a grant from or contract with the corporation or a tax incentive from the Department during the time that the conflict party (or the spouse or immediate family member of the conflict party) serves as a director, officer, or employee of the corporation and for one year after termination of such service.

(4) The corporation shall not enter into any grant or contract with any entity in which a conflict party is entitled to receive more than 7.5%, or in which a conflict party together with his or her spouse and immediate family members residing in his or her residence are entitled to receive more than 15%, of the total distributable income of the entity. For purposes of this paragraph (4), "distributable income" means the income of a company after payment of all expenses, including employee salary and bonus, and retained earnings, which is distributed to those entitled to receive a share of the income. In the case of a for-profit corporation, "distributable" income means dividends. When calculating entitlement to distributable income the entitlement shall be determined at the end of the company's most recent fiscal year.

(5) The board of directors shall determine appropriate penalties for any violations of these provisions.

Section 33. Prohibition on political contributions. Any business entity whose cumulative pending applications for grants or tax incentives or previously approved grants or tax incentives in the aggregate value more than $50,000, and any affiliated entities or affiliated persons of such business entity, are prohibited from making any contributions to any political committees established to support the Governor or any candidate for Governor.

Section 35. Fundraising. The corporation shall raise and accept funds from private donors to support its economic development efforts and other operations.

Section 40. Repeal. This Act is repealed 3 years after the effective date of this Act.

(20 ILCS 605/605-300 rep.)

Section 90. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by repealing Section 605-300.