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91_SB0786enr SB786 Enrolled LRB9100876DHmbB 1 AN ACT promoting micro-enterprise and self-employment in 2 Illinois. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 Micro-Enterprise and Self-Employment Assistance Act. 7 Section 5. Definitions. In this Act: 8 "Department" means the Illinois Department of Commerce 9 and Community Affairs. 10 "Micro-enterprise" means a new or existing very small 11 business entity or self-employed individual with 5 or fewer 12 employees whose capital needs are too small generally to 13 obtain business credit from regulated commercial financial 14 institutions. 15 "Microcredit" means the practice of lending money or 16 extending other forms of business credit to 17 micro-enterprises. 18 "Small non-bank lender" or "SNBL" means an entity that is 19 not regulated by the Office of Banks and Real Estate, the 20 Department of Financial Institutions, or any agency of the 21 United States government, and that is primarily engaged in 22 providing microcredit to micro-enterprises. 23 Section 10. Legislative findings. 24 (a) Micro-enterprise is important to the economy of 25 Illinois. Very small businesses provide livelihoods to 26 thousands of people in this State and produce and provide 27 essential goods and services. Most micro-enterprises are 28 businesses operated by a single self-employed person with 29 few, if any, additional employees. Self-employed persons 30 comprise more than 8% of the total workforce in Illinois. SB786 Enrolled -2- LRB9100876DHmbB 1 (b) Micro-enterprise is an important component of this 2 State's welfare-to-work policy. Micro-enterprise provides 3 individuals with opportunities for economic self-sufficiency 4 and self-respect. Owning and operating one's own small 5 business should be a viable alternative to welfare and to 6 traditional wage-labor employment. It is in the best interest 7 of this State and its economy that individuals be encouraged 8 to form and operate their own small businesses. 9 (c) Lack of access to capital is a serious barrier to 10 starting and successfully operating a very small business. 11 Traditional financial institutions cannot profitably provide 12 business credit to micro-enterprises. The high relative cost 13 of making and servicing loans to very small businesses 14 discourages commercial banks from making those loans. Minimum 15 loan size requirements deprive micro-enterprises of access to 16 traditional sources of business loans and have created a 17 credit gap for very small businesses. Trends in the 18 financial services industry may exacerbate this problem by 19 causing commercial banks to concentrate on larger, more 20 profitable loans. 21 (d) Many prospective micro-entrepreneurs lack the basic 22 business knowledge and experience necessary to own and 23 operate a successful small business venture. Providing 24 adequate business education, training and counseling services 25 to micro-enterprises can substantially increase their chances 26 of success. It is in the best interests of Illinois that 27 Illinois micro-entrepreneurs have access to adequate business 28 training programs, counseling services, and other forms of 29 technical assistance. 30 (e) Small non-bank lenders provide the principal source 31 of microcredit for many micro-enterprises. Various public 32 and private entities have formed SNBL's to fill the credit 33 gap that exists for very small businesses in Illinois. 34 Micro-loans provided by SNBL's are often the only SB786 Enrolled -3- LRB9100876DHmbB 1 institutional source of capital available to 2 micro-enterprises. Coordinating technical assistance 3 programs for micro-enterprises with credit provided by SNBL's 4 can significantly increase the success rates of microcredit 5 loans. Assisting technical assistance providers and 6 encouraging good microcredit practices by SNBL's are in the 7 public interest. 8 (f) It is in the best interests of this State and the 9 micro-enterprises operating in this State that programs 10 assisting self-employed persons and small businesses be 11 well-publicized, coordinated, and accessible to all eligible 12 micro-enterprises. This State and its units of local 13 government sponsor many programs intended primarily to 14 benefit small business. These programs include training 15 programs, business counseling services, loan programs, 16 specialized grants, tax incentives, procurement 17 opportunities, and other small business assistance services. 18 Many of these programs also benefit SNBL's by enhancing the 19 credit and business opportunities of micro-enterprises. 20 Modem communications technology, including the Internet, can 21 increase the effectiveness and availability of these 22 programs. 23 Section 15. Micro-Enterprise Council. There is created 24 within the Department the Micro-Enterprise Assistance 25 Council. The Council shall consist of 11 members. One of 26 the members shall be the Director of the Department or his or 27 her designee, one shall be the Director of Financial 28 Institutions or his or her designee, one shall be the 29 Secretary of Human Services or his or her designee, and one 30 shall be the chair of the Illinois State Micro-Enterprise 31 Initiative or his or her designee. Three members shall be 32 appointed by the Governor. Of the remaining 4 members, one 33 shall be appointed by the President of the Senate, one by the SB786 Enrolled -4- LRB9100876DHmbB 1 Minority Leader of the Senate, one by the Speaker of the 2 House of Representatives, and one by the Minority Leader of 3 the House of Representatives. Appointed members shall be 4 uniquely qualified by education, professional knowledge, or 5 experience to serve on the Council. Appointed members shall 6 include operators of micro-enterprises, representatives of 7 SNBL's, financial institutions, technical assistance 8 providers, and other individuals who have been active in 9 assisting micro-enterprises and SNBL's. Appointed members 10 shall reflect the geographic, cultural, and ethnic diversity 11 of this State. 12 Of the initial appointments, members shall be randomly 13 assigned to staggered terms; 4 members shall be appointed for 14 a term of 3 years, 4 members shall be appointed for a term of 15 2 years, and 3 members shall be appointed for a term of one 16 year. Upon the expiration of each member's term, a successor 17 shall be appointed for a term of 3 years. In the case of a 18 vacancy in the office of any member, a successor shall be 19 appointed for the remainder of the unexpired term by the 20 person designated as responsible for making the appointment. 21 No member shall serve more than 3 consecutive terms. Members 22 shall serve without compensation but shall be reimbursed for 23 expenses incurred in connection with the performance of their 24 duties as members. 25 One of the members shall be designated as chairperson by 26 the Governor. If the Governor does not appoint the 27 chairperson within 60 days after the effective date of this 28 Act, the Council shall convene and elect a chairperson by a 29 simple majority vote. Upon a vacancy in the position of 30 chairperson, the Governor shall have 30 days from the date of 31 the vacancy to appoint a new chairperson. If the Governor 32 does not appoint a new chairperson within 30 days, the 33 Council shall convene and elect a new chairperson by a simple 34 majority vote. SB786 Enrolled -5- LRB9100876DHmbB 1 The first meeting of the Council shall be held within 65 2 days after the effective date of this Act. The Council 3 shall meet quarterly and may hold other meetings on the call 4 of the chairperson. Meetings may be held in person or by 5 conference telephone call. Six members constitute a quorum. 6 The Council may adopt rules it deems necessary to govern its 7 procedures. The Department and the Department of Financial 8 Institutions shall cooperate with the Council to fulfill the 9 purposes of this Act and shall provide the Council with 10 dedicated staff and administrative support necessary for the 11 Council to perform its duties under this Act. The Department 12 may apply for grants from the public and private sectors and 13 is authorized to accept grants, gifts, and donations. 14 Section 20. Duties and responsibilities of the Council 15 and the Department. 16 (a) With the advice and assistance of the Council, the 17 Department shall promote micro-enterprise and self-employment 18 as alternatives to welfare and traditional wage-labor 19 employment throughout Illinois. 20 (b) The Council shall conduct hearings, as necessary, and 21 issue an annual report to the Department, the Governor, and 22 the General Assembly regarding the status of micro-enterprise 23 within Illinois. In that regard, the Council shall review 24 the following: 25 (1) The number of micro-enterprises in Illinois and 26 their prospects for business success. 27 (2) The availability of technical assistance 28 services and other programs and incentives for 29 micro-enterprise in Illinois, including entrepreneurial 30 training, legal services, business incubators, insurance 31 and risk-sharing pools, and other business assistance. 32 (3) The availability and sources of microcredit in 33 Illinois. SB786 Enrolled -6- LRB9100876DHmbB 1 (4) Barriers to the success of micro-enterprises 2 operating in Illinois and disincentives to persons 3 seeking self-employment as a means of earning a 4 livelihood. 5 (c) The Council shall recommend to the Department, the 6 Governor, and the General Assembly, on an annual basis, all 7 of the following: 8 (1) New initiatives to advocate and promote 9 micro-enterprise and self-employment as alternatives to 10 welfare and traditional wage-labor employment. 11 (2) Programs and incentives to coordinate and fund 12 more efficiently the technical support services required 13 by micro-enterprises in Illinois, including business 14 training, small business incubators, legal services, 15 insurance and risk-sharing pools, communications, and 16 information technology. 17 (3) Ways to assist SNBL's and to encourage the 18 availability of microcredit to micro-enterprises and to 19 other small businesses that may have difficulty obtaining 20 business credit as a consequence of changes in the 21 financial services industry. 22 (4) Better coordination of public and private 23 sector programs and initiatives intended to help and 24 promote self-employment and very small businesses. 25 (5) Changes in State and local laws and practices 26 that disproportionately burden micro-enterprises or that 27 discourage persons from seeking self-employment, 28 including without limitation changes in welfare rules, 29 licensing and permitting requirements, tax laws, and 30 procurement practices. 31 (d) The Department, with the advice and assistance of 32 the Council, shall solicit and apply for grants, matching 33 funds, and other moneys from public and private sources in 34 order to promote micro-enterprise and microcredit in Illinois SB786 Enrolled -7- LRB9100876DHmbB 1 and to fund the Council's activities. 2 (e) The Council shall perform the other duties and 3 discharge the other responsibilities conferred upon it by 4 this Act. 5 (f) The Department may hold hearings, take testimony, 6 and request information from State agencies. 7 Section 25. Interactive Micro-Enterprise Resource Guide. 8 The Department, with the advice and assistance of the 9 Council, shall create and maintain an Internet-based resource 10 guide for Illinois micro-enterprises, small businesses, 11 SNBL's, financial institutions, and technical assistance 12 providers. The guide shall provide an up-to-date listing of 13 all programs, counseling services, tax incentives, loans, 14 grants, procurement opportunities, and other assistance 15 offered by any agency of federal, State, or local government 16 that is targeted primarily to benefit self-employed persons 17 and other small business ventures located in any particular 18 location within Illinois. Every State agency and unit of 19 local government shall cooperate with the Council in 20 assembling, reporting, and updating, not less than quarterly 21 in a format specified by the Council, information concerning 22 all programs administered or sponsored by that agency or 23 local governmental unit. The Department, in cooperation with 24 the Council, shall establish reporting regulations that 25 minimize the burden of compliance on reporting entities. The 26 Department shall provide the necessary staff, administrative 27 support, and Internet access in order to create and maintain 28 the guide. The Department may impose user fees on some or all 29 users of the guide to the extent that the Department and the 30 Council believe that fees are advisable. 31 Section 30. Illinois Microcredit Study. The Department, 32 with the advice and assistance of the Council and the SB786 Enrolled -8- LRB9100876DHmbB 1 Department of Financial Institutions, shall conduct, 2 complete, and deliver to the Governor and the General 3 Assembly within 24 months following the effective date of 4 this Act a study of microcredit in Illinois. The study shall 5 include but not be limited to the following factors: 6 (1) Assessing the availability of, demand for, and 7 potential for promoting business development of microcredit 8 in Illinois. 9 (2) Investigating the effects of trends in the financial 10 services industry on the ability of very small businesses in 11 Illinois to access business credit. 12 (3) Identifying cost-effective ways of promoting the 13 availability of microcredit in Illinois, which may include 14 State-sponsored loan programs, guarantees, secondary markets 15 for microcredit loans, and statewide coordination of existing 16 microcredit programs. 17 (4) Identifying successful microcredit practices and 18 recommending guidelines for SNBL's and other providers of 19 microcredit in Illinois. The Department of Financial 20 Institutions shall provide the Department and the Council 21 with necessary staff and administrative support in order to 22 conduct, compile, and publish the study. 23 Section 95. Repeal. This Act is repealed December 31, 24 2004. 25 Section 99. Effective date. This Act takes effect upon 26 becoming law.