Department of Commerce & Economic Opportunity

Business Enterprise Act

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The Business Enterprise for Minorities, Females and Persons with Disabilities Act helps state government promote the economic development of businesses certified as owned and controlled by minorities, females and persons with disabilities. It does so by establishing a goal that at least 19 percent of procurement contracts let by the state go to businesses certified under the Act. There are currently 62 agencies and nine universities letting contracts subject to the Act.

Program Activities

Day-to-day activities designed to help meet the contracting goal:

• Agency Training Program staff work with each agency’s purchasing group to educate them about the Act and provide them with information about BEP-certified businesses interested in contracting with the state.
• Compliance and Monitoring Program staff help ensure that agencies actively consider BEP-certified businesses when issuing bids/proposals or when entering into contracts.

Program Eligibility

The program is open to:

Minority Business Enterprise (MBE): A business concern which is at least 51 percent owned by one or more minority persons or, in the case of a corporation, at least 51 percent of the stock of which is owned by one or more minority persons, and the management and daily business operations of which are controlled by one or more minority individuals who own it. The 51 percent owners must be U.S. citizens or resident aliens.

Minority is defined as:

• Black/African American: A person having origins in any of the black racial groups in Africa
• Hispanic: A person of Spanish or Portuguese culture with origins in Mexico, South or Central America or the Caribbean Islands, Spain or Portugal regardless of race
• Asian American: A person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent or the Pacific
• Native American or Alaskan Native: A person having origins in any of the original peoples of North America

Female Business Enterprise (FBE): A business concern which is at least 51 percent owned by one or more females or, in the case of a corporation, at least 51 percent of the stock of which is owned by one or more females, and the management and daily business operations of which are controlled by one or more females who own it. The 51 percent owners must be U.S. citizens or resident aliens.

Person with a Disability (PBE): A business concern which is at least 51 percent owned by one or more persons with a disability or, in the case of a corporation, at least 51 percent of the stock of which is owned by one or more persons with a disability, and the management and daily business operations of which are controlled by one or more persons with a disability who own it. The 51 percent owners must be U.S. citizens or resident aliens. The Act also qualifies not-for-profit agencies for persons with a disability organized pursuant to Section 501 of the Internal Revenue Code of 1954 (this is the only instance in which not-forprofit

entities are eligible under the Act).

Combinations: When a business concern is owned by at least 51 percent of any combination of minority persons, females, or persons with disabilities, even though none of the three classes alone holds at least a 51 percent interest, the ownership requirement for purposes of the Business Enterprise Act is considered to be met. The certification category for the business is that of the class holding the largest ownership in the business.

Annual Sales Limitation

Eligible businesses must have annual gross sales of $27 million or less for the most recent fiscal period. However, businesses with gross sales over $27 million can apply for a waiver to participate in the program on an individual contract basis, if the contract will provide significant employment and/or subcontracting opportunities for minorities, females and persons with disabilities.

For More Information

You can obtain more information about the program and the necessary forms by

contacting:

Business Enterprise Program for Minorities, Females, and Persons with Disabilities

James R.Thompson Center

100 West Randolph Street

Suite 3-350

Chicago, Illinois  60601

Telephone:     (312) 814-4190 (Voice or TDD/TTY)

 (800) 356-9206 (BEP Toll-Free Line)

                     (800) 526-0844 (Illinois Relay Center)

 (312) 814-5539 (Fax)

Capital Access Program

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The Capital Access Program (CAP) is designed to encourage lending institutions to make loans to businesses that do not qualify for conventional financing. CAP is based on a portfolio insurance concept where the borrower and the Department of Commerce and Economic Opportunity each contribute a percentage of the loan amount into a reserve fund located at the lender's bank. This reserve fund enables the financial institution to make loans beyond its conventional risk threshold and is available to draw upon to recover losses on loans made under the program.

A CAP loan is a private market transaction between the lender and the borrower with all terms, fees, conditions, rates, collateral, etc., being determined by the lending bank. The borrower's non-refundable contribution to the reserve fund must be between 3 and 7 percent of the total loan amount. DCEO will provide a matching contribution. A 133 percent match to the borrower's contribution will be provided on the first $2,000,000 in CAP loans enrolled at the lender bank. A higher match will be provided to minority/woman/disabled owned businesses (150 percent) and businesses located in a federally designated Empowerment Zone or Enterprise Community (200 percent). Loan proceeds cannot be used for debt refinancing or for financing passive real estate ownership.

Eligibility

The business must be for-profit, located in Illinois and employ 500 employees or less. The borrower cannot be in the business of manufacturing or selling firearms at wholesale or retailor in the business of manufacturing or selling tobacco products, liquor or sexually explicit materials at wholesale.

Contact Information
Illinois Department of Commerce and Economic Opportunity
Business Finance Division

Chicago Office:

James R.Thompson Center
100 W. Randolph, Suite 3-400Chicago, Illinois 60601
(312) 814-9303 TDD: (800) 419-0667

Springfield Office:

620 East Adams
Springfield, Illinois 62701
(217) 782-3891 TDD: (800) 785-6055

Illinois EDGE

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The Illinois EDGE program is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). A Business Investment Committee of the Illinois Economic Development Board (IEDB) makes recommendations regarding the types of projects that may seek this tax credit. DCEO's review will be based on written applications submitted by interested firms.

The amount of the tax credit is calculated on a case-by-case basis. The tax credits could be as high as the amount of tax receipts collected from the Illinois income taxes paid by newly-hired and/or retained employees of the firm as pertaining to the project. As a tax credit, the EDGE program allows a firm to reduce the costs of doing business in Illinois when compared with similar costs in other states where it could have located its operation.

The credits would be available to the firm for up to a total of 10 years for each project. While each annual tax credit amount cannot be larger than the firm's state income tax liability (the income tax credits would not be refundable), the credit can be carried forward for up to five years. Each firm receiving competitive credits would have to maintain the jobs created and/or retained along with the capital investment concurrent with the period in which it claims the credits.

Eligibility

The development project must add to the export potential of Illinois; for example, manufacturing or services exported out of state would be acceptable, but not retail trade and personal services. The project must be an expansion of an existing operation or a new location. Plant relocations within Illinois are eligible for consideration only if there is a documented and substantiated business reason why their current location is inadequate.

Each project must commit to make a capital investment in the state of at least $5 million and must create a minimum of 25 new jobs (excluding recalls, transfers, etc.), or the project must meet the investment and job creation and/or retention requirements as set forth by DCEO. The applicant must demonstrate that if not for the credit , the project would not occur in Illinois by providing documentation evidencing that:

• The applicant has multi-state location options and could reasonably and efficiently locate outside of the state, or

• At least one other state is being considered for the project, or

• Receipt of the credit is a major factor in the applicant's decision and that without the credit, the applicant likely would not create and/or retain jobs in Illinois, or

• The credit is essential to the applicant's decision to create and/or retain jobs in the state.

The cost differential should be identified, using the best available data, in the projected costs for the applicant's project compared to the projected costs in the competing state, including the impact of the competing state's incentive programs. The cost differential should, for example, demonstrate the following:

• specific costs of labor, utilities, taxes and other costs of an out-of-state site or the industry's cost structure in the competing region
• specific cost differential due to the impact of a competing state's incentive programs

Contact Information
Illinois Department of Commerce and Economic Opportunity
Economic Development for a Growing Economy Program
620 East Adams, Third Floor
Springfield, Illinois 62701

Dennis Gorss: (217) 524-8449; TDD (800) 785-6055
Fax: (217) 524-4145
dgorss@illinoisbiz.biz