Bill Text: IL SB2562 | 2023-2024 | 103rd General Assembly | Introduced

---

Bill Title: 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.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-04-05 - Rule 2-10 Committee Deadline Established As May 3, 2024 [SB2562 Detail]

Download: Illinois-2023-SB2562-Introduced.html

---

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
SB2562 LRB103 31695 MXP 60231 b
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Capital Development Board Act is amended by
adding Section 21 as follows:
(20 ILCS 3105/21 new)
Sec. 21. Disadvantaged business revolving loan and grant
program.
(a) As used in this Section is to provide for assistance to
disadvantaged business enterprises and minority-owned
businesses with project financing costs for those firms that
are ready, willing, and able to participate on Board
construction contracts. The Board's disparity study recommends
and supports a financing program to address this barrier faced
by disadvantaged business enterprises and minority-owned
businesses.
(b) As used in this Section:
"Construction" means building, altering, repairing,
improving, or demolishing any public structure or building, or
making improvements of any kind to public real property.
"Construction" does not include the routine operation, routine
repair, or routine maintenance of existing structures,
buildings, or real property.

SB2562 - 2 - LRB103 31695 MXP 60231 b
"Construction-related services" includes construction
design, layout, inspection, support, feasibility or location
study, research, development, planning, or other investigative
study undertaken by a construction agency concerning
construction or potential construction.
"Disadvantaged business enterprise" has the meaning given
to that term in 49 CFR Part 26.
"Escrow account" means a fiduciary account established
with:
(1) a banking corporation which is both organized
under the Illinois Banking Act and authorized to accept
and administer trusts in this State; or
(2) a national banking association that has its
principal place of business in this State and that is
authorized to accept and administer trusts in this State.
"Fund Control Agent" means a person who provides
managerial and technical assistance to disadvantaged business
enterprises or minority-owned businesses and holds the
authority to manage a loan under this Section. The Fund
Control Agent will be procured by the Board under a request for
proposal process governed by the Illinois Procurement Code and
rules adopted under that Code.
"Loan" or "loan assistance funds" means a low-interest
line of credit made available to a selected disadvantaged
business enterprise or minority-owned business under this
program for the purposes set forth in subsection (f).

SB2562 - 3 - LRB103 31695 MXP 60231 b
"Minority-owned business" means a business which is at
least 51% owned by one or more minority persons, or in the case
of a corporation, at least 51% of the stock in which is owned
by one or more minority persons; and the management and daily
business operations of which are controlled by one or more of
the minority individuals who own it, as defined by Section 2 of
the Business Enterprise for Minorities, Women, and Persons
with Disabilities Act.
(c) The Board may enter into agreements to make loans to
disadvantaged business enterprises or minority-owned
businesses certified by the Board for participation on
Board-procured construction and construction-related
contracts.
The Board shall establish a loan selection committee to
review applications and select eligible disadvantaged business
enterprises or minority-owned businesses for low-interest
loans under this program. A selection committee shall be
comprised of at least 3 members appointed by the Commissioner
of the Board and shall include at least one public member from
the construction or financing industry. The public member may
not be employed or associated with any disadvantaged business
enterprise or minority-owned business holding a contract with
the Board nor may the public member's firm be considered for a
contract with the Board while he or she is serving as a public
member of the committee. Terms of service for public members
shall not exceed 5 years. No public member of the loan

SB2562 - 4 - LRB103 31695 MXP 60231 b
selection committee shall hold consecutive terms, nor shall
any member receive any compensation other than for reasonable
expenses for service related to this committee.
The Board shall establish through administrative rules the
requirements for eligibility and criteria for loan
applications, approved use of funds, amount of loans, interest
rates, collateral, and terms. The Board is authorized to adopt
rules to implement this Section.
The Board shall notify the prime contractor on a project
that a subcontractor on the same project has been awarded a
loan from the Working Capital Revolving Loan Fund. If the loan
agreement is amended by the parties of the loan agreement, the
prime contractor shall not be a party to any disadvantaged
business enterprise or minority-owned business loan agreement
between the Board and participating subcontractor and shall
not incur any liability for loan debt accrued as a result of
the loan agreement.
(d) Loan funds shall be disbursed to the escrow account,
subject to appropriation, from the Working Capital Revolving
Loan Fund established as a special fund in the State treasury.
Loaned funds that are repaid to the Board shall be deposited
into the Working Capital Revolving Loan Fund. Other
appropriations, grants, awards, and donations to the Board for
the purpose of the revolving loan program established by this
Section shall be deposited into the Working Capital Revolving
Loan Fund.

SB2562 - 5 - LRB103 31695 MXP 60231 b
(e) A funds control process shall be established to serve
as an intermediary between the Board and the contractor to
verify payments and to ensure paperwork is properly filed. The
Fund Control Agent and contractor shall enter into an
agreement regarding the control and disbursement of all
payments to be made by the Fund Control Agent under the
contract. The Board shall authorize and direct the Fund
Control Agent to review all disbursement requests and
supporting documents received from the contractor. The Fund
Control Agent shall direct the escrow account to disburse
escrow funds to the subcontractor, material supplier, and
other appropriate entities by written request for the
disbursement. The disadvantaged business enterprise or
minority-owned business shall maintain control over its
business operations by directing the payments of the loan
funds through its relationship with the Funds Control Agent.
The funds control process shall require the Fund Control Agent
to intercept payments made from a contractor to a
subcontractor receiving a loan made under this Act and allow
the Fund Control Agent to deduct any unpaid loan repayments
owed to the State before releasing the payment to the
subcontractor.
(f) Loan assistance funds shall be allowed for current
liabilities or working capital expenses associated with
participation in the performance of contracts procured and
awarded by the Board for transportation construction and

SB2562 - 6 - LRB103 31695 MXP 60231 b
construction-related purposes. Loan funds 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.
The loan agreement shall provide for the terms and
conditions of repayment which shall not extend repayment
longer than final payment made by the Board following
completion and acceptance of the work authorized for loan
assistance under the program. The funds shall be loaned with
interest.
(g) The number of loans one disadvantaged business
enterprise or minority-owned business may receive under this
program is limited to 3. Loans shall not be granted
simultaneously. An applicant shall not be permitted to obtain
a loan under this program for a different and additional
project until payment in full of any outstanding loans granted
under this program has been received by the Board.
(h) The rate of interest for any loan shall be set by rule.
(i) The loan amount to any successful applicant shall not
exceed 55% of the contract or subcontract supporting the loan.

SB2562 - 7 - LRB103 31695 MXP 60231 b
(j) Nothing in this Section shall impair the contractual
rights of the Board and the prime contractor or the
contractual rights between a prime contractor and
subcontractor.
(k) Nothing in this Section is intended nor shall be
construed to vest applicants denied funds by the Board in
accordance with this Section a right to challenge, protest, or
contest the awarding of funds by the Board to successful
applicants or any loan or agreement executed in connection
with it.
(l) The debt delinquency prohibition under Section 50-11
of the Illinois Procurement Code applies to any future
contracts or subcontracts in the event of a loan default.
(m) Investment income which is attributable to the
investment of moneys in the Working Capital Revolving Loan
Fund shall be retained in the Working Capital Revolving Loan
Fund.
(n) By January 1, 2024 and January 1 of each succeeding
year, the Board shall report to the Governor and the General
Assembly on the utilization and status of the revolving loan
program. The report shall, at a minimum, include the amount
transferred from the Road Fund to the Working Capital
Revolving Loan Fund, the number and size of approved loans,
the amounts disbursed to and from the escrow account, the
amounts, if any, repaid to the Working Capital Revolving Loan
Fund, the interest and fees paid by loan recipients, and the

SB2562 - 8 - LRB103 31695 MXP 60231 b
interest earned on balances in the Working Capital Revolving
Loan Fund, and the names of any contractors who are delinquent
or in default of payment. The January 1, 2027 report shall
include an evaluation of the program by the Board to determine
the program's viability and progress towards its stated
purpose.
(o) The authorization to execute additional loans or
request transfers to the Working Capital Revolving Loan Fund
expires on June 1, 2028. The Comptroller shall order
transferred and the Treasurer shall transfer any available
balance remaining in the Working Capital Revolving Loan Fund
to the Road Fund on January 1, 2029, or as soon thereafter as
may be practical. Any loan repayments, interest, or fees that
are by the terms of a loan agreement payable to the Working
Capital Revolving Loan Fund after June 20, 2028 shall instead
be paid into the Road Fund as the successor fund to the Working
Capital Revolving Loan Fund.
Section 10. The State Finance Act is amended by adding
Section 8s as follows:
(30 ILCS 105/8s new)
Sec. 8s. Transfer to the Working Capital Revolving Loan
Fund.
(a) The Working Capital Revolving Loan Fund is created as
a special fund in the State treasury.

SB2562 - 9 - LRB103 31695 MXP 60231 b
(b) Except as provided in subsection (c), upon the written
request of the Commissioner of the Capital Development Board
or the Director of the Illinois Highway Toll Authority, the
State Comptroller shall order transferred and the State
Treasurer shall transfer amounts not to exceed $20,000,000 in
aggregate during a fiscal 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 or as soon thereafter as may be practical.
(c) No transfer may be requested or ordered if the
available balance in the Working Capital Revolving Loan Fund
is equal to or greater than $40,000,000.
Section 15. The Toll Highway Act is amended by adding
Section 40 as follows:
(605 ILCS 10/40 new)
Sec. 40. Disadvantaged business revolving loan and grant
program.
(a) The purpose of this Section is to provide for
assistance to disadvantaged business enterprises or
minority-owned businesses with project financing costs for
those firms that are ready, willing, and able to participate
on Authority construction contracts. The Authority's disparity
study recommends and supports a financing program to address
this barrier faced by disadvantaged business enterprises or

SB2562 - 10 - LRB103 31695 MXP 60231 b
minority-owned businesses.
(b) As used in this Section:
"Construction" means building, altering, repairing,
improving, or demolishing any public structure or building, or
making improvements of any kind to public real property.
"Construction" does not include the routine operation, routine
repair, or routine maintenance of existing structures,
buildings, or real property.
"Construction-related services" includes construction
design, layout, inspection, support, feasibility or location
study, research, development, planning, or other investigative
study undertaken by a construction agency concerning
construction or potential construction.
"Disadvantaged business enterprise" has the meaning given
to that term in 49 CFR Part 26.
"Escrow account" means a fiduciary account established
with:
(1) a banking corporation which is both organized
under the Illinois Banking Act and authorized to accept
and administer trusts in this State; or
(2) a national banking association that has its
principal place of business in this State and that is
authorized to accept and administer trusts in this State.
"Fund Control Agent" means a person who provides
managerial and technical assistance to disadvantaged business
enterprises or minority-owned businesses and holds the

SB2562 - 11 - LRB103 31695 MXP 60231 b
authority to manage a loan under this Section. The Fund
Control Agent will be procured by the Authority under a
request for proposal process governed by the Illinois
Procurement Code and rules adopted under that Code.
"Loan" or "loan assistance funds" means a low-interest
line of credit made available to a selected disadvantaged
business enterprise or minority-owned business under this
program for the purposes set forth in subsection (f).
"Minority-owned business" means a business which is at
least 51% owned by one or more minority persons, or in the case
of a corporation, at least 51% of the stock in which is owned
by one or more minority persons; and the management and daily
business operations of which are controlled by one or more of
the minority individuals who own it, as defined by Section 2 of
the Business Enterprise for Minorities, Women, and Persons
with Disabilities Act.
(c) The Authority may enter into agreements to make loans
to disadvantaged business enterprises or minority-owned
businesses certified by the Authority for participation on
Authority-procured construction and construction-related
contracts.
The Authority shall establish a loan selection committee
to review applications and select eligible disadvantaged
business enterprises or minority-owned businesses for
low-interest loans under this program. A selection committee
shall be comprised of at least 3 members appointed by the

SB2562 - 12 - LRB103 31695 MXP 60231 b
Director of the Authority and shall include at least one
public member from the construction or financing industry. The
public member may not be employed or associated with any
disadvantaged business enterprises or minority-owned business
holding a contract with the Authority nor may the public
member's firm be considered for a contract with the Authority
while he or she is serving as a public member of the committee.
Terms of service for public members shall not exceed 5 years.
No public member of the loan selection committee shall hold
consecutive terms, nor shall any member receive any
compensation other than for reasonable expenses for service
related to this committee.
The Authority shall establish through administrative rules
the requirements for eligibility and criteria for loan
applications, approved use of funds, amount of loans, interest
rates, collateral, and terms. The Authority is authorized to
adopt rules to implement this Section.
The Authority shall notify the prime contractor on a
project that a subcontractor on the same project has been
awarded a loan from the Working Capital Revolving Loan Fund.
If the loan agreement is amended by the parties of the loan
agreement, the prime contractor shall not be a party to any
disadvantaged business enterprise or minority-owned business
loan agreement between the Authority and participating
subcontractor and shall not incur any liability for loan debt
accrued as a result of the loan agreement.

SB2562 - 13 - LRB103 31695 MXP 60231 b
(d) Loan funds shall be disbursed to the escrow account,
subject to appropriation, from the Working Capital Revolving
Loan Fund established as a special fund in the State treasury.
Loaned funds that are repaid to the Authority shall be
deposited into the Working Capital Revolving Loan Fund. Other
appropriations, grants, awards, and donations to the Authority
for the purpose of the revolving loan program established by
this Section shall be deposited into the Working Capital
Revolving Loan Fund.
(e) A funds control process shall be established to serve
as an intermediary between the Authority and the contractor to
verify payments and to ensure paperwork is properly filed. The
Fund Control Agent and contractor shall enter into an
agreement regarding the control and disbursement of all
payments to be made by the Fund Control Agent under the
contract. The Authority shall authorize and direct the Fund
Control Agent to review all disbursement requests and
supporting documents received from the contractor. The Fund
Control Agent shall direct the escrow account to disburse
escrow funds to the subcontractor, material supplier, and
other appropriate entities by written request for the
disbursement. The disadvantaged business enterprise or
minority-owned business shall maintain control over its
business operations by directing the payments of the loan
funds through its relationship with the Funds Control Agent.
The funds control process shall require the Fund Control Agent

SB2562 - 14 - LRB103 31695 MXP 60231 b
to intercept payments made from a contractor to a
subcontractor receiving a loan made under this Act and allow
the Fund Control Agent to deduct any unpaid loan repayments
owed to the State before releasing the payment to the
subcontractor.
(f) Loan assistance funds shall be allowed for current
liabilities or working capital expenses associated with
participation in the performance of contracts procured and
awarded by the Authority for transportation construction and
construction-related purposes. Loan funds 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.
The loan agreement shall provide for the terms and
conditions of repayment which shall not extend repayment
longer than final payment made by the Authority following
completion and acceptance of the work authorized for loan
assistance under the program. The funds shall be loaned with
interest.
(g) The number of loans one disadvantaged business

SB2562 - 15 - LRB103 31695 MXP 60231 b
enterprise or minority-owned business may receive under this
program is limited to 3. Loans shall not be granted
simultaneously. An applicant shall not be permitted to obtain
a loan under this program for a different and additional
project until payment in full of any outstanding loans granted
under this program has been received by the Authority.
(h) The rate of interest for any loan shall be set by rule.
(i) The loan amount to any successful applicant shall not
exceed 55% of the contract or subcontract supporting the loan.
(j) Nothing in this Section shall impair the contractual
rights of the Authority and the prime contractor or the
contractual rights between a prime contractor and
subcontractor.
(k) Nothing in this Section is intended nor shall be
construed to vest applicants denied funds by the Authority in
accordance with this Section a right to challenge, protest, or
contest the awarding of funds by the Authority to successful
applicants or any loan or agreement executed in connection
with it.
(l) The debt delinquency prohibition under Section 50-11
of the Illinois Procurement Code applies to any future
contracts or subcontracts in the event of a loan default.
(m) Investment income which is attributable to the
investment of moneys in the Working Capital Revolving Loan
Fund shall be retained in the Working Capital Revolving Loan
Fund.

SB2562 - 16 - LRB103 31695 MXP 60231 b