2005 Illinois Code - Chapter 20 Executive Branch 20 ILCS 690/ Rural Diversification Act.
(20 ILCS 690/1) (from Ch. 5, par. 2251)
Sec. 1.
Short title.
This Act may be cited as the
Rural Diversification Act.
(Source: P.A. 85‑180; 86‑1475.)
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(20 ILCS 690/2) (from Ch. 5, par. 2252)
Sec. 2.
Findings and declaration of policy.
The General Assembly
hereby finds, determines and declares:
(a) That Illinois is a state of diversified economic strength and that
an important economic strength in Illinois is derived from rural business
production and the agribusiness industry;
(b) That the Illinois rural economy is in a state of transition, which
presents a unique opportunity for the State to act on its growth and
development;
(c) That full and continued growth and development of Illinois' rural
economy, especially in the small towns and farm communities, is vital
for Illinois;
(d) That by encouraging the development of diversified rural business
and agricultural
production, nonproduction and processing activities in Illinois, the State
creates a beneficial climate for new and improved job opportunities for its
citizens and expands jobs and job training opportunities;
(e) That in order to cultivate strong rural economic growth and
development in Illinois, it is necessary to proceed with a plan which
encourages Illinois rural businesses and agribusinesses to expand
business employment opportunities through diversification of business and
industries, offers managerial, technical and financial assistance to or on
behalf of rural businesses and agribusiness, and works in a cooperative
venture and spirit with Illinois' business, labor, local government,
educational and scientific communities;
(f) That dedication of State resources over a multi‑year period
targeted to promoting the growth and development of one or more classes of
diversified rural products, particularly new agricultural products, is an
effective use of State funds;
(g) That the United States Congress, having identified similar needs and
purposes has enacted legislation creating the United States Department of
Agriculture/Farmers Home Administration Non‑profit National Finance
Corporations Loan and Grant Program and made funding available to the states
consistent with the purposes of this Act.
(h) That the Illinois General Assembly has enacted "Rural Revival" and a
series of "Harvest the Heartland" initiatives which create within the
Illinois Finance Authority a "Seed Capital Fund"
to provide
venture capital for emerging new agribusinesses, and to
help coordinate cooperative research and development on new agriculture
technologies in conjunction with the Agricultural Research and Development
Consortium in Peoria, the United State Department of Agriculture Northern
Regional Research Laboratory in Peoria, the institutions of higher learning
in Illinois, and the agribusiness community of this State, identify the
need for enhanced efforts by the State to promote the use of fuels
utilizing ethanol made from Illinois grain, and promote forestry
development in this State; and
(i) That there is a need to coordinate the many programs offered by the
State of Illinois Departments of Agriculture, Commerce and Community
Affairs, and Natural Resources, and the Illinois Finance Authority that
are targeted to agriculture and the rural community with those offered by
the federal government. Therefore it is desirable that the fullest measure
of coordination and integration of the programs offered by the various
state agencies and the federal government be achieved.
(Source: P.A. 93‑205, eff. 1‑1‑04.)
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(20 ILCS 690/3) (from Ch. 5, par. 2253)
Sec. 3. Definitions. The following words and phrases shall have the
meaning ascribed to each of them in this Section unless the context clearly
indicates otherwise:
(a) "Office" means the Office of Rural Community Development within
the Illinois Department of Commerce and Economic Opportunity.
(b) "Rural business" means a business, including a cooperative,
proprietorship, partnership, corporation or other entity, that is located
in a municipality of 20,000 population or less, or in an
unincorporated area of a county with a population of less than 350,000, but
not in a municipality which is contiguous to a municipality or
municipalities with a population greater than 20,000. The business must
also be engaged in manufacturing, mining, agriculture, wholesale,
transportation, tourism, or utilities or in research and development or
services to these basic industrial sectors.
(c) "Agribusiness", for purpose of this Act, means a rural business that
is defined as an agribusiness pursuant to
the Illinois Finance Authority Act.
(d) "Rural diversification project" means financing to a rural business
for a specific activity undertaken to promote: (i) the improvement and
expansion of business and industry in rural areas; (ii) creation of
entrepreneurial and self‑employment businesses;
(iii) industry or region wide research directed to profit oriented
uses of rural resources, and (iv) value added
agricultural supply, production processing or reprocessing
facilities or operations and shall include but not be limited to
agricultural diversification projects.
(e) "Financing" means direct loans at market or below market rate
interest, grants, technical assistance contracts,
or other means whereby monetary assistance is
provided to or on behalf of rural business or agribusinesses for purposes of
rural diversification.
(f) "Agricultural diversification project" means financing awarded to a
rural business for a
specific activity undertaken to promote diversification of the farm economy
of this State through (i) profit oriented nonproduction uses of Illinois
land resources, (ii) growth and development of new crops or livestock not
customarily grown or produced in this State, or (iii) developments which
emphasize a vertical integration of grain or livestock produced or raised
in this State into a finished product for consumption or use. "New crops
or livestock not customarily grown or produced in this State" does not
include corn, soybeans, wheat, swine, or beef or dairy cattle. "Vertical
integration of grain or livestock produced or raised in this State" includes
any new or existing grain or livestock grown or produced in this State.
(Source: P.A. 93‑205, eff. 1‑1‑04; 94‑793, eff. 5‑19‑06.)
(20 ILCS 690/4) (from Ch. 5, par. 2254)
Sec. 4.
Powers of the Office.
The Office has the following powers,
in addition to those granted to it by other law:
(a) To provide financing pursuant to the provisions of this Act, from
appropriations made by the General Assembly from the General Revenue Fund,
Federal trust funds, and the Rural Diversification Revolving Fund created
herein, to or on behalf of rural business and agribusiness to promote rural
diversification.
(b) To provide financing in the form of direct loans and grants from
State funds for qualifying agricultural and rural diversification
projects independent of federal financial participation, except that no
grants from State funds shall be made directly with a rural business.
(c) To provide financing in the form of direct loans,
grants, and technical assistance contracts from State funds
for qualifying agricultural and rural diversification projects in
coordination with federal financial participation in the form of loan
guarantees, direct loans, and grant and technical assistance contract reimbursements.
(d) To consider in the award of State funded financing the satisfaction
of matching requirements associated with federal financing participation
and the maximization of federal financing participation to the benefit of
the rural Illinois economy.
(e) To enter into agreements or contracts, accept funds or grants, and
cooperate with agencies of the Federal Government, State or Local
Governments, the private sector or non‑profit organizations to carry out
the purposes of this Act;
(f) To enter into agreements or contracts for the promotion, application
origination, analysis or servicing of the financings made by the
Office pursuant to this Act;
(g) To receive and accept, from any source, aid or contributions of
money, property or labor for the furtherance of this Act and collect fees,
charges or advances as the Department may determine in connection with its financing;
(h) To establish application, notification, contract and other
procedures and other procedures and rules deemed necessary and appropriate
by the Office to carry out the provisions of this Act;
(i) To foreclose any mortgage, deed of trust, note, debenture, bond or
other security interest held by the Office and to take all such actions
as may be necessary to enforce any obligation held by the Office;
(j) To analyze opportunities and needs of rural communities, primarily
those communities experiencing farm worker distress including consultation
with regional commissions, governments, or diversification
organizations, and work to strengthen the coordination of existing programs
offered through the Office, the Department of Agriculture, the Department of
Natural Resources, the Illinois Finance
Authority, the Cooperative Extension Service and others for rural and
agribusiness development and assistance; and
(k) To cooperate with an existing committee comprised of representatives
from the Office, the Rural Affairs Council or its successor, the Department of
Agriculture, the Illinois Finance Authority and
others to
coordinate departmental policies with other State agencies and to promote
agricultural and rural diversification in the State.
(l) To exercise such other right, powers and duties as are necessary to
fulfill the purposes of this Act.
(Source: P.A. 93‑205, eff. 1‑1‑04.)
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(20 ILCS 690/5) (from Ch. 5, par. 2255)
Sec. 5.
Agricultural and rural diversification financing.
(a) The Office's financing to or on behalf of rural businesses or
agribusinesses in the State shall be for the purpose of assisting in the cost
of agricultural and rural diversification projects including (i) acquisition,
construction, reconstruction, replacement, repair,
rehabilitation, alteration, expansion or extension of real property,
buildings or machinery and equipment but not the acquisition
of unimproved land for the production of crops or livestock; (ii) working
capital items including but not limited to, inventory, accounts receivable
and prepaid expenses; (iii) organizational expenses including, but not limited
to, architectural and engineering costs, legal services, marketing analyses,
production analyses, or other professional services; (iv) needed leasehold
improvements, easements, and other amenities required to prepare a site; (v)
information, technical support and technical assistance contracts to local
officials or not‑for‑profit agencies regarding private, state and
federal resources, programs or grant assistances and the needs and
opportunities for diversification; and (vi) when conducted in
cooperation with federal reimbursement programs, financing costs including
guarantee fees, packaging fees and origination fees but not debt refinancing.
(b) Agricultural or rural diversification financing to a rural
business or agribusiness under this Act shall be used
only where it can be shown that the agricultural or rural diversification
project for which financing is being sought has the potential to achieve
commercial success and will increase employment, directly or indirectly
retain jobs, or promote local diversification.
(c) The Office shall establish an internal review committee with
the Director of the Rural Affairs Council, or his designee,
the Director of the Department of Agriculture, or his designee, and the
Director of the Illinois Finance Authority, or
his designee, as
members to assist in the review of all project applications.
(d) The Office shall not provide financing to a rural business or
agribusiness unless the application includes convincing evidence that a
specific agricultural or rural diversification project is ready to
occur and will only occur if the financing is made. The Office shall also
consider the applicability of other state and federal programs prior to
financing any project.
(Source: P.A. 93‑205, eff. 1‑1‑04.)
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(20 ILCS 690/6) (from Ch. 5, par. 2256)
Sec. 6.
Application procedures.
(a) Applications for financing shall
be made in the form and manner as the Office prescribes. However,
each application shall address the following details:
(i) the agricultural or rural diversification project, (ii) the applicant's
history, (iii) future market prospects, (iv) actual
and pro forma income statements, (v) credit and financial information, (vi)
employment projections, and (vii) related or other details as may be
requested by the Office.
(b) In reviewing the application, the Office shall consider the
following, as well as other items as determined by the Office: (i) The
essential need, which must be clearly documented, for the agricultural or rural
diversification financing, as evidenced by rate of return,
inadequate private market financing, inability to acquire financing from
other State authorities or agencies, interstate competition of facilities,
or other similar evidence of essential need for public financing. (ii) The
applicant's financing capability and
its ability to pay for, or secure the payment of, part of the proposed
agricultural or rural diversification project. (iii) Documentation of
an increase or potential increase in taxes or employment, a potential to
retain existing jobs, or a potential improvement in the diversification of
the rural economy or job market in relation to the financing requested.
(Source: P.A. 85‑180.)
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(20 ILCS 690/7) (from Ch. 5, par. 2257)
Sec. 7.
Financing Conditions.
Agricultural or rural diversification
financing awarded by the Office is subject to the following conditions:
(a) Financial assistance shall be used by a rural business for
agricultural or rural diversification projects.
(b) The Office shall determine the interest rate, the terms and
conditions for repayment, and the repayment period which shall not exceed 10 years.
(c) Financial assistance for any one agricultural or rural diversification
project shall not exceed $200,000, the rural business or agribusiness must
provide a minimum of 15 percent of the equity in the project, the rural
business or agribusiness must demonstrate a positive cash flow as evidenced
by a net income before taxes of 5 percent of the gross income of the rural
business or agribusiness based on actual or projected income and expenses,
and State financing under this Act shall cover no more than 25
percent of the total costs of the diversification project unless the
Director of the Department waives the 25 percent limitation.
(Source: P.A. 85‑180.)
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(20 ILCS 690/8) (from Ch. 5, par. 2258)
Sec. 8.
Rural Diversification Revolving Fund.
(a) There
is hereby created within the State Treasury the Rural Diversification
Revolving Fund ("Fund"). The Office has the authority to
make expenditures from the Fund pursuant to appropriations in furtherance
of the purposes of this Act. The State Treasurer is custodian of the
fund and shall invest such funds in securities constituting direct
obligations of the United States or any instrumentality or agency thereof,
or obligations fully guaranteed by the United States, or any
instrumentality or agency thereof.
(b) Sources for deposits into the Fund shall include, but not be limited
to, the following: (i) all receipts, including fees, principal and interest
payments, royalties, or other payments or repayments from any financing
agreement entered into by the Office made from the Fund or made
pursuant to this Act; (ii) all proceeds of assets of whatever nature received
by the Office as a result of default or delinquency with respect to
financing agreements made from the Fund including proceeds from the sale,
disposal, lease or rental of real or personal property which the Office
may receive as a result thereof; (iii) any appropriations, grants or gifts
made to the fund or repayments of funds from direct appropriations by the
General Assembly pursuant to this Act; (iv) any income received from
interest on investments of moneys in the Fund; (v) any subsequent federal
financial participating reimbursements associated with grants and technical
assistance contracts originally financed from State sources; and (vi) all
recoveries and receipts, including fees, principal and interest payments,
royalties, or other payments or repayments arising from any financing
agreement funded in whole or in part with federal financial participation
as permitted by or consistent with applicable federal law or regulation.
(Source: P.A. 85‑180.)
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(20 ILCS 690/9) (from Ch. 5, par. 2259)
Sec. 9.
Confidentiality.
Any document, materials or data made or
received by any member, agent, or employee of the Department, to the extent
that such material or data consist of trade secrets or commercial or
financial information regarding the operation of any business conducted by
a beneficiary or recipient of any form of assistance which the Department
is empowered to render under this Act, or regarding the competitive
position of such entity in a particular field of endeavor,
is confidential and shall not be deemed public records, provided that
information relating to the ownership of such recipient or beneficiary is
not be exempt under this Section from public disclosure requirements.
(Source: P.A. 85‑180.)
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(20 ILCS 690/10) (from Ch. 5, par. 2260)
Sec. 10.
Hold Harmless.
Nothing in this Act shall be construed as
creating any rights of a competitor of an approved borrower or any
applicant whose application is denied by the Office to challenge any
application which is accepted by the Office or any loan or other
agreement executed in connection therewith.
(Source: P.A. 85‑180.)
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