(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.)
(20 ILCS 690/2) (from Ch. 5, par. 2252)
Sec. 2. Findings and declaration of policy. The General Assembly hereby finds, determines, and declares:
(Source: P.A. 100-863, eff. 8-14-18.)
(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.)
(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.)
(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.)
(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.)
(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.)
(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.)
(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.)