TITLE 35: ENVIRONMENTAL PROTECTION

SUBTITLE G: WASTE DISPOSAL

CHAPTER II: ENVIRONMENTAL PROTECTION AGENCY

PART 886

BROWNFIELDS REDEVELOPMENT LOAN PROGRAM

SUBPART A: GENERAL PROVISIONS

Section

886.100

Purpose

886.105

Administration

886.110

Definitions

886.115

Severability

SUBPART B: BROWNFIELDS REDEVELOPMENT LOANS

Section

886.200

Scope and Availability of Loans

886.201

Eligible Applicants

886.205

Loan Issuance Criteria

886.210

Pre-Applications for Brownfields Redevelopment Loans

886.215

Applications for Brownfields Redevelopment Loans

886.220

Agency Action on Application

886.225

Loan Award Acceptance

886.230

Loan Agreement

886.235

Amendments to Loan Agreement

886.240

Cost Criteria

886.245

Loan Disbursements

886.250

Loan Recipient Responsibilities

886.255

Requirements Applicable to Contracting and Subcontracting

886.260

Agency Cost Recovery

SUBPART C: NONCOMPLIANCE WITH LOAN CONDITIONS AND PROCEDURES

Section

886.300

Agency Action for Noncompliance with Loan Agreements and Procedures

886.305

Loan Termination by the Agency

886.310

Project Termination by the Loan Recipient

886.315

Stop-Work Orders

886.320

Covenant Against Contingent Fees

886.325

Recovery of Loan Funds

886.330

Indemnification

886.335

Statutory Requirements

886.340

Waiver of Procedures

SUBPART D: ACCESS, AUDIT AND RECORDS

Section

886.400

Access

886.405

Audit and Records

886.410

Single Audit Act

SUBPART E: INTEREST RATES, LOAN LIMITATIONS, CREDIT WORTHINESS AND

FINANCIAL CAPABILITY

Section

886.500

Fixed Loan Rate

886.505

Limitations on Loan Amounts

886.510

Credit Worthiness and Financial Capability

SUBPART F: DEDICATED SOURCE OF REVENUE, REPAYMENT AND DELINQUENCY

Section

886.600

Dedicated Source of Revenue, Security and Collateral

886.605

Loan Repayment to the Agency

886.610

Delinquent Loan Repayments

AUTHORITY: Implementing and authorized by Section 58.15 of the Environmental Protection

Act [415 ILCS 5/58.15].

SOURCE: Adopted at 24 Ill. Reg. 12992, effective August 8, 2000.

NOTE: Italics indicates statutory language.

SUBPART A: GENERAL PROVISIONS

Section 886.100

Purpose

The purpose of this Part is to provide financial assistance in the form of loans for the funding of

site investigation, site remediation, or both, at brownfields sites.

Section 886.105

Administration

The Brownfields Redevelopment Loan Program shall be administered by the Illinois

Environmental Protection Agency as an instrumentality of the State of Illinois in accordance with

State and federal laws.

Section 886.110

Definitions

Unless specified otherwise, all terms shall have the meanings set forth in the Illinois

Environmental Protection Act. Additionally, for purposes of this Part, the following definitions

apply:

"Act" means the Illinois Environmental Protection Act [415 ILCS 5].

"Agency" means the Illinois Environmental Protection Agency.

"Applicant" means a unit of local government or private party that applies for a

brownfields redevelopment loan.

"Brownfields redevelopment loan" means a loan issued pursuant to Section 58.15

of the Act and Subpart B of this Part.

"Brownfields site" or "brownfields" means a parcel of real property, or a portion

of the parcel, that has actual or perceived contamination and an active potential

for redevelopment.

(Section 58.2 of the Act)

"Dedicated source of revenue" means the type of security and the basis of legal

authorization that are dedicated by legislative enactment or other appropriate

authority along with the applicable revenue source pledged for repayment and

deposited into an account restricted to the purpose of loan repayment to the

Brownfields Redevelopment Fund, which is sufficient to repay the principal and

interest on the loan.

"Fixed loan rate" means one-half the market interest rate but not less than 2.50%.

"Interest rate" means not less than one-fourth of the market interest rate rounded

to the nearest .01%.

"Loan agreement" means the written loan agreement documents and amendments

thereto signed by both the Agency and a loan recipient in which the terms and

conditions governing the loan are stated and agreed to by both parties.

"Loan recipient" means a unit of local government or private party that has been

awarded a loan for brownfields redevelopment under Section 58.15 of the Act.

"Loan support rate" means not more than one-fourth of the market interest rate

rounded to the nearest .01%.

"Market interest rate" means the mean interest rate of the 20 General Obligation

Bond Buyer Index, from July 1 to June 30 of the preceding State fiscal year

rounded to the nearest .01%.

"Unit of local government" means an incorporated city, village, or town in this

State. Unit of local government does not mean a township, town when that term is

used as the equivalent of a township, incorporated town that has superseded a

civil township, county, or school district, park district, sanitary district, or similar

governmental district.

(Section 58.2 of the Act)

"Principal" means all disbursements, including interest and loan support accrued

on the disbursements, that will be financed at the time the repayment schedule

period begins.

"Project" means the activities or tasks the Agency identifies in the loan agreement

for which the loan recipient may expend loan funds.

"State" means the State of Illinois.

Section 886.115

Severability

If any Section, subsection, sentence or clause of this Part shall be adjudged unconstitutional,

void, invalid, or otherwise unlawful, such adjudication shall not affect the validity of this Part as

a whole, or any Section, subsection, sentence, or clause thereof not adjudged unconstitutional,

void, invalid, or otherwise unlawful.

SUBPART B: BROWNFIELDS REDEVELOPMENT LOANS

Section 886.200

Scope and Availability of Loans

The Agency shall establish and administer a revolving loan program to be known

as the "Brownfields Redevelopment Loan Program" for the purpose of providing

loans to be used for site investigation, site remediation, or both, at brownfields

sites.

(Section 58.15(a) of the Act)

Loans shall be at or below market interest rates in accordance with a formula set

forth in

this Part. (Section 58.15(b)(1) of the Act)

Loans shall be awarded subject to availability of funding based on the order of

receipt of applications satisfying all requirements as set forth

in this Part.

(Section 58.15(b)(2) of the Act)

In addition to any other requirements or conditions placed on loans by this Part,

loan agreements shall include the following requirements:

The loan recipient shall secure the loan repayment obligation.

(Section

58.15(b)(4)(A) of the Act)

Completion of the loan repayment shall not exceed 5 years.

(Section

58.15(b)(4)(B) of the Act)

Loan agreements shall provide for a confession of judgment by the loan

recipient upon default.

(Section 58.15(b)(4)(C) of the Act)

Loans shall not be used to cover expenses incurred prior to the approval

of the loan application.

(Section 58.15(b)(5) of the Act)

Repayment of loans shall commence within 12 months of the initial disbursement

of funds by the Agency.

Loan recipients may use up to 10% of borrowed funds for administrative costs as

defined in the loan agreement.

Section 886.201

Eligible Applicants

Units of local government and private parties shall be eligible to apply for loan assistance to

perform investigative or remedial activities at a site where there is a release, threatened release,

or suspected release of hazardous substances, pesticides, or petroleum, provided the project site

is eligible for entry into the Site Remediation Program pursuant to 35 Ill. Adm. Code 740.

Section 886.205

Loan Issuance Criteria

Criteria for awarding loans shall include, but shall not be limited to, the following:

Credit worthiness and ability to repay the loan;

Potential for economic redevelopment;

Long-term benefits and sustainability;

Strength of community and local support;

Interest of potential future users of the brownfields site;

Protection of human health and the environment; and

A written commitment by the loan recipient or other entity to enter the

brownfields site into the Site Remediation Program.

In awarding loans, the Agency may give weight to geographic location to enhance

geographic distributions of loans across the State.

Section 886.210

Pre-Applications for Brownfields Redevelopment Loans

Every loan applicant shall submit to the Agency a pre-application that, at a minimum, includes

the following items:

the reason for the proposed project;

a description of the proposed project;

an estimated cost of the proposed project;

a proposed schedule for completion of the proposed project;

a summary of prior environmental assessments;

an explanation of the applicant=s relationship to the brownfields

site; and

a strategy for loan repayment.

Section 886.215

Applications for Brownfields Redevelopment Loans

To be considered for a brownfields redevelopment loan, an applicant shall file

with the Agency a complete application, in accordance with the requirements of

this Section.

Applicants for brownfields redevelopment loans shall use loan application forms

furnished by the Agency, or a similar format. Loan applications, including budget

forms, may be obtained from and must be submitted to: Illinois Environmental

Protection Agency, Bureau of Land, Office of Brownfields Assistance, 1021

North Grand Avenue East, Springfield, Illinois 62794-9276.

A complete brownfields redevelopment loan application shall include the

following:

Background information, including:

An identification of the site location and size, including the legal

description and the Property Tax ID;

An explanation of the relationship of the loan applicant to the site;

A description of the investigative and remedial work performed at

the site, if any, and a summary of all prior environmental

assessments and conclusions, including attachments of copies of all

environmental reports generated for any part of the site (i.e., Site

Investigation Report, Remediation Objectives Report, Remedial

Action Plan, Remedial Action Completion Report, or their

equivalents);

A description of the negative effects on the local community of the

site and the positive effects on the local community of funding and

implementing the proposed project;

A description of the local government=s involvement and planned

additional involvement in the proposed project;

A description of the anticipated long-term benefits of the project

and the means by which the local government will sustain the

benefits;

A description of the future participation of the site in the Site

Remediation Program and an identification of who the remedial

applicant will be, including a letter committing the site=s entry into

the Site Remediation Program; and

An indication as to how the success of the project will be

measured.

The project plan, including:

A description of all components and phases of the proposed

project, including an indication of each activity's relationship to

Site Remediation Program (35 Ill. Adm. Code 740) regulations and

program requirements;

A description of the planned or proposed tasks to be performed by

parties involved;

A schedule of the work plan by tasks, including specific activities

and events;

Letters of agreement or other documentation showing the applicant

is authorized, by law or consent, to act on behalf of or in lieu of the

owner or operator of the site;

Letters of agreement or other documentation from the contractor or

subcontractors involved in or responsible for components or phases

of the proposed project; and

Maps showing the location of the proposed project and the areas

affected by the proposed project.

Information on project team members, including:

The name of the applicant project manager and a description of his

or her previous management experience and other pertinent

experience and capabilities;

The names of other applicant project team members and a

description of their job titles, work assignments and experience;

and

The name, telephone number, fax number and e-mail address, if

any, of the applicant project team member designated to serve as

liaison with the Agency.

Information on any environmental consultant to be employed by the

applicant, including:

The name, telephone number, fax number and e-mail address, if

any, of the environmental consulting firm;

A description of any previous project management experience and

other pertinent experience and capabilities of the environmental

consultant;

The names of key environmental consultant personnel and a

description of their job titles, work assignments and experience;

A detailed explanation of the tasks the consultant is to perform in

the proposed project; and

Evidence of relevant experience of all environmental consultant

personnel involved in the project.

A completed budget package on forms provided by the Agency.

A demonstration of the loan applicant's credit worthiness, including:

The loan applicant's credit history;

Information as to whether the loan applicant has ever defaulted on

any of its prior debt issues;

The loan applicant's source of revenue for repaying the loan;

Information as to whether there are restrictions on what additional

debts can be issued by the loan applicant;

The loan applicant's plan for financing any project costs that are

not eligible for loan financing;

An explanation as to whether the amount and timing of the loan

applicant=s revenues match up with the loan repayment schedule;

and

An indication as to whether the loan applicant will receive project

funds from multiple sources, including whether funding from those

sources will be available at the same time.

A written demonstration of the loan applicant=s willingness to monitor the

project's activities, progress, spending and budget.

Section 886.220

Agency Action on Application

Issuance of brownfields redevelopment loans is subject to availability of funding.

The Agency shall take action on all pending complete brownfields redevelopment

loan applications, at a minimum, at the close of each of two loan application

periods per year, the first ending January 1 and the second ending July 1, except as

provided in subsection (c) of this Section.

The Agency may award and fund any loan prior to the end of a loan application

period provided that the loan applicant demonstrates that:

Remediation of the project site is necessary to assure protection of human

health and environment; and

Failure to issue the loan prior to the end of the loan application period

would substantially impair implementation of the project.

If an applicant submits an incomplete application, the Agency shall so notify the

applicant in writing, identifying the information that is lacking, and shall impose a

deadline by which the deficiencies shall be corrected or additional information is

to be provided to the Agency by the applicant. Failure on the part of the loan

applicant to correct the deficiencies or provide the additional information by the

deadline imposed by the Agency shall be sufficient basis for the Agency to treat

the application as withdrawn by the applicant.

The Agency shall, no more than 90 days after the close of each loan application

period, or in accordance with subsection (c) of this Section, in writing, notify each

applicant with a pending application:

If funding is available for brownfields redevelopment loans, of that

applicant=s selection or rejection for a loan; or

If funding is not available, of the unavailability of loan assistance.

Loan applicants shall not obtain loan assistance by default due to failure by the

Agency to act within the time frame set forth in subsection (e) of this Section.

Section 886.225

Loan Award Ac

No more than 30 days after receipt of loan award selection notification by the Agency, the loan

recipient shall notify the Agency in writing of its acceptance. If the loan recipient fails to so

notify the Agency, the loan award shall be null and void.

Section 886.230

Loan Agreemen

Upon receipt of written acceptance of a loan award, the Agency shall send to the

loan recipient formal loan agreement documents, including:

A loan agreement to be signed by the Agency and the loan recipient;

A copy of the loan recipient's complete application, including budget

forms; and

A form on which the loan recipient is to state the loan recipient=s federal

taxpayer identification number or social security number.

The Agency shall not sign a loan agreement until the loan recipient has corrected

any errors identified by the Agency in the loan application and has signed the loan

agreement.

The loan takes effect on the date that the Agency signs the loan agreement and

interest begins to accrue on the date of the first loan disbursement.

Once signed by both the Agency and the loan recipient, the loan agreement,

comprising the written loan agreement documents, and any amendments thereto,

shall govern the loan.

The Agency shall keep the original loan agreement documents and provide a copy

to the loan recipient.

The loan agreement may be amended in accordance with Section 886.235

(Amendments to Loan Agreement) of this Part.

Section 886.235

Amendments to Loan Agreement

To implement a project change, the loan recipient first must obtain a formal

amendment to the loan agreement. The loan recipient may request an amendment

to the loan agreement by submitting an amended loan application to the Agency at

any point during the loan term.

The loan agreement may be amended only by the mutual consent of the parties set

forth in writing as a formal loan agreement amendment, signed and dated by the

Agency and the loan recipient.

The loan recipient may request amendments for project changes, including, but

not limited to:

Increasing the amount of State funds needed to complete the project;

Altering the scope of the loan, as agreed to at the time of the loan award

(e.g., by changing methodologies or personnel to be used); or

Extending any contractual or completion date for the project.

No more than 90 days after receipt of an amended loan application, the Agency

shall notify the loan recipient in writing of its approval or rejection of the

requested amendment to the loan agreement.

The Agency shall not approve any amendment to the loan agreement in violation

of the limitations on loans set forth in this Part.

The Agency shall approve an amendment to the loan agreement to the extent that

the Agency may approve the amendment consistent with the requirements of this

Part, if the loan recipient makes a showing that:

The original project cost approval was based on estimated costs or

contractor bids, where the actual costs or contractor bids are over or under

the estimated costs;

Amendments to State statutes have affected or will affect the project cost;

A project element was inadvertently omitted; or

An approved project element has been found unnecessary.

If the Agency approves a requested amendment to a loan agreement, the Agency

shall prepare and send an amended loan agreement and a formal amendment

signature page to the loan recipient. The loan recipient shall sign and date the

formal amendment signature page and then return it to the Agency. The Agency

shall sign and date the formal amendment signature page and then send a copy of

the formal amendment signature page and a copy of the amended loan agreement,

along with a letter notifying the loan recipient of the Agency's approval of the

requested amendment, to the loan recipient.

Section 886.240

Cost Criteria

The Agency shall approve for payment to the loan recipient, under the terms set

forth in Section 886.245 of this Part, only costs that have been incurred by the

loan recipient and that meet the following criteria:

Costs within the scope of the project for which the loan was awarded;

Costs that are reasonable and necessary include, but are not limited to,

costs associated with:

Agency oversight that result from the loan recipient=s participation

in the Site Remediation Program of Title XVII of the Act;

Environmental consultant oversight services;

Remedial investigation and design;

The development and implementation of activities necessary to

establish remediation objectives;

Laboratory services necessary to determine site characterization

and to establish cleanup objectives;

The installation and operation of groundwater investigation and

groundwater monitoring wells;

The development and implementation of a soil sampling plan;

The development of a groundwater corrective action system;

The development of a soil corrective action plan;

Seeking payment from the Brownfields Redevelopment Loan

Program in accordance with Section 886.200(f) of this Part;

The purchase of non-expendable materials, supplies, equipment or

tools used for the brownfields project;

Removing, mitigating or preventing the release, threatened release

or suspected release of hazardous substances, pesticides or

petroleum;

The demolition and removal of buildings and other structures

located upon the site if such activity is necessary to the

performance of the remediation; and

Monitoring activities, including sampling and analysis, that are

reasonable and necessary during the site remediation process;

Costs equal to, but not exceeding, the total amount of the loan award;

Costs incurred on or after the date the loan agreement is executed;

Costs incurred without a knowing violation of any State or federal law;

and

Costs incurred pursuant to a contract or subcontract in conformance with

Section 886.255 (Requirements Applicable to Contracting and

Subcontracting) of this Part.

Costs the Agency shall not approve for payment because they are not necessary

for the completion of the work required pursuant to the Agency-approved

application and loan agreement include, but are not limited to:

Costs or losses resulting from business interruption in connection with the

project;

Costs associated with improperly collected, transported or analyzed

laboratory samples;

Costs associated with improperly installed sampling or monitoring wells;

Interest or finance costs charged as direct costs;

Insurance costs charged as direct costs;

Costs associated with land acquisition;

Cost of fines and penalties for violations of local, State and federal law;

Costs outside the scope of the Agency-approved project;

Costs associated with the ordinary operating expenses of local

government;

10)

Costs associated with ordinary site maintenance;

11)

Costs associated with personal injury compensation or damages arising out

of the project;

12)

Costs incurred prior to the execution of the loan agreement; and

13)

Costs associated with the replacement of buildings and other structures

located upon the site.

Section 886.245

Loan Disbursements

The Agency shall disburse loan proceeds to loan recipients for eligible costs

incurred by the loan recipient, provided those costs are within the scope of the

budget submitted pursuant to Section 886.215 of this Part.

To receive a loan disbursement from the Brownfields Redevelopment Loan

Program, the loan recipient shall submit a written request for a disbursement to

the Agency with documentation of the activities performed and a breakdown of

the costs sufficient to demonstrate that the costs for which a disbursement is

sought are reasonable and have been incurred by the loan recipient.

Documentation provided shall include, but not be limited to, the following:

An identification of the time period for which the activities/services were

performed and the costs were incurred;

A brief description of the work performed;

A breakdown of the activities/services performed cross-referencing tasks

proposed in the work plan schedule;

The names and titles of individuals performing activities/services and the

dates and hours worked;

Copies of invoices; and

A list of expenses and/or costs incurred in connection with the

activities/services performed.

The loan recipient may submit an initial request for a loan disbursement at any

time after the costs for which payment is sought have been incurred. Subsequent

requests for loan disbursements must be spaced at least 90 days apart.

The Agency shall use the criteria set forth in Section 886.240 (Cost Criteria) of

this Part in determining whether to approve a loan disbursement to the loan

recipient for costs included in each request for a loan disbursement.

The Agency shall send a voucher for payment of an approved request for a loan

disbursement to the Comptroller's office no more than 90 days after receipt of the

request.

Following a review of the applicant=s request for a loan disbursement, the

Agency shall have the authority to deny a request for a loan disbursement that

does not meet all of the requirements of this Part. The Agency shall notify a loan

applicant in writing of its denial of a request for a loan disbursement within 45

days after its receipt of a request, and the written notification shall include a

statement of specific reasons why the request is being denied in whole or in part.

Section 886.250

Loan Recipient Responsibilities

The loan recipient shall submit quarterly progress reports to the Agency during the

term of the loan. Each progress report should be a short narrative of the activities

performed and the dates that they were performed during that quarter and shall

include, but not be limited to, the following information:

The report period;

A summary of the activities/services performed and identified by project

task;

The dates that the activities/services were performed;

The names of firms and individuals performing the activities/services;

A disclosure of any personnel changes;

A disclosure of significant issues that arose during the quarter that may

necessitate a modification or amendment to the original work plan

submitted;

A disclosure of major threshold accomplishments; and

Projected completion dates for the remaining activities/services to be

performed.

The loan recipient shall submit a detailed final report to the Agency at the end of

the loan term. In the final report, the loan recipient shall describe how the tasks

described in the project plan submitted by the loan recipient have been fulfilled.

If the loan recipient fails to timely submit quarterly progress reports or a final

report, the Agency may impose any of the sanctions set forth in Subpart C

(Noncompliance with Loan Conditions and Procedures) of this Part.

Section 886.255

Requirements Applicable to Contracting and Subcontracting

The following conditions and limitations shall apply to all contracts and

subcontracts entered into by the loan recipient:

The loan recipient must use a freely and openly competitive bidding

process in contracting and must require the same of any contractor in

subcontracting;

Only fair and reasonable profits may be earned by contractors and

subcontractors in contracts and subcontracts under Agency loans. Factors

to be considered in determining a fair and reasonable profit shall include

project-related: material acquisition costs; labor costs; management costs;

contract risks; capital investments; degree of independent development;

and cost control and record keeping efforts. The determination of a fair

and reasonable profit shall not be based upon the application of a

predetermined percentage factor;

The loan recipient, rather than the Agency, is responsible for the

administration and successful accomplishment of the project for which the

Agency loan is awarded. The loan recipient, rather than the Agency, is

responsible for the settlement and satisfaction of all contractual and

administrative issues arising out of contracts and subcontracts entered into

under the loan. This responsibility includes, but is not limited to, issuance

of invitations for bids or requests for proposals, selection of contractors,

award of contracts, protest of awards, claims, disputes and other

procurement matters;

Any contract or subcontract must include a provision allowing project-

related access, in accordance with Section 886.400 (Access) of this Part;

Any contract or subcontract must provide that the Agency or any

authorized representative shall have access to any books, documents,

papers, and records, including computer-generated documents, of the

contractor or subcontractor that are pertinent to the project, for the purpose

of making an audit, examination, excerpts, and transcriptions thereof;

Neither the Agency nor the State shall be a party to any contract or

subcontract, solicitation, or request for proposals;

Any contract or subcontract shall be in compliance with all local, State and

federal law.

No contract or subcontract shall be awarded to any person or organization that

does not:

Have adequate financial resources, experience, organization, technical

qualification, and facilities for performance of the subagreement, or a firm

written commitment or arrangement to obtain such;

Have staffing sufficient to comply with the completion schedule for the

project;

Have a demonstrated record of integrity, good judgment, and performance,

including any prior performance under grants, loans or contracts with the

federal or any state government;

Have an established financial management system and audit procedure;

Maintain a written property management system that provides procedures

for the acquisition, maintenance, safeguarding and disposition of all

project-related property; and

Conform to the civil rights law, equal employment opportunity law, and

labor law requirements, as well as all other statutes of the State.

Section 886.260

Agency Cost Recovery

If the Agency undertakes a response action at the site of an approved project, the

Agency will not seek recovery of its costs under Section 22.2 or Title XVII of the

Act from a loan recipient as an owner or operator if the loan recipient=s status as

an owner or operator is based solely on the loan recipient=s:

Execution of a loan agreement; or

Implementation of an approved project.

The exclusion provided under subsection (a) of this Section shall not apply to any

loan recipient who has caused or contributed to the release or threatened release of

a hazardous substance or pesticide from the facility, and such loan recipient

shall

be subject to the provisions of the Act in the same manner and to the same extent,

both procedurally and substantively, as any nongovernmental entity, including

liability under Sections 22.2(f) and 58.9 of the Act.

( Section 22.2(h)(2)(H) of the

Act)

SUBPART C: NONCOMPLIANCE WITH LOAN CONDITIONS AND PROCEDURES

Section 886.300

Agency Action for Noncompliance with Loan Agreements and Procedures

If the loan recipient fails to make timely payments or otherwise fails to meet its

obligations as provided in

this Part,

the Agency is authorized to pursue the

collection of the amounts past due, the outstanding loan balance, and the costs

thereby incurred, either pursuant to the Illinois State Collection Act of 1986 or by

taking any other means provided by law, including the taking of title, by

foreclosure or otherwise, to any project or other property pledged, mortgaged,

encumbered, or otherwise available as security or collateral.

(Section 58.15(b)(6)

of the Act)

In addition to such other remedies as may be provided by law, if the loan recipient

fails to comply with any term or condition of the loan agreement or this Part, the

Agency may:

Revoke the loan and recover all loan funds disbursed;

Terminate the loan in accordance with Section 886.305 of this Part;

Issue a stop-work order or suspend all project work in accordance with

Section 886.315 of this Part; or

Take such other action as the Agency is authorized by law.

No action shall be taken under this Section without prior oral or written

consultation with the loan recipient.

In determining whether to take action and which action to take under this Section,

the Agency shall consider factors, including, but not limited to:

The severity of the violations;

The number of violations by the loan recipient;

Whether the violation is a continuing one;

Whether the loan recipient can remedy the violation; and

Whether the loan recipient and any contractor or subcontractor remain

capable of complying with the approved work project.

Section 886.305

Loan Termination by the Agency

The Agency, by written notice, may terminate the loan, in whole or in part, for

cause. Cause for termination shall include, but shall not be limited to, failure by

the loan recipient to comply with the terms and conditions of the loan agreement

or this Part.

No action shall be taken under this Section without a prior reasonable and good

faith attempt to consult, either orally or in writing, with the loan recipient.

Section 886.310

Project Termination by the Loan Recipient

The loan recipient may request the termination of an incomplete project for which

a loan has been awarded only for good cause.

Within 90 days of receipt of the loan recipient=s request to terminate a project, the

Agency shall make a finding as to good cause. Good cause shall include, but shall

not be limited to:

A change in the Brownfields Redevelopment Loan Program requirements

or priorities;

Lack of adequate funding; or

Advancements in technology.

If the Agency finds that the loan recipient=s request to terminate the project is for

good cause, it shall terminate the loan, effective upon the date the request to

terminate the project was received by the Agency. The loan recipient shall repay

the loan funds previously disbursed in accordance with the loan agreement.

If the Agency finds that the loan recipient=s request to terminate the project is

without good cause, the loan shall be revoked and the loan recipient shall take the

following action:

Within 30 days after the date the loan is revoked, the loan recipient shall

return all loan funds previously disbursed by the Agency by sending a

certified check to the Brownfields Redevelopment Fund; and

The loan recipient shall secure the site so that it poses no immediate threat

to human health and safety.

Section 886.315

Stop-Work Orders

The Agency may, for any violation of this Part, issue a written stop-work order

requiring the loan recipient to stop all or any part of the project work, effective for

a period of not more than 30 days from the date of the order, or for any further

period to which the parties may agree in writing. The Agency shall include in any

stop-work order a list of the project activities to which the order applies.

Upon receipt of a stop-work order, the loan recipient must comply with its terms

and stop the incurrence of costs allocable to the work covered by the order during

the period of work stoppage.

No more than 30 days after the date of the stop-work order, or within any

extension of that period to which the parties agree in writing, the Agency shall:

Upon resolution of the violation leading to the stop-work order, cancel the

stop-work order; or

Terminate the portion of the loan covered by the stop-work order, as

provided in Section 886.305 (Loan Termination by the Agency) of this

Part.

If a stop-work order issued under this Section is canceled, or the effective period

of the order or any written extension thereof expires, the loan recipient shall

resume work.

The loan recipient may not obtain payment for costs

associated with a stop-work order unless the Agency authorizes payment in

writing.

Section 886.320

Covenant Against Contingent Fees

The loan recipient must warrant, as part of the loan agreement, that no person has

been employed or retained to solicit or secure a loan under this Part based upon an

agreement or understanding for a commission, percentage, brokerage or

contingent fee.

For breach or violation of this warranty, the Agency shall have the right to

terminate the loan in accordance with Section 886.305 (Loan Termination by the

Agency) of this Part, without liability, or to deduct from the loan award, or

otherwise recover, the full amount of such commission, percentage, brokerage or

contingent fee.

Section 886.325

Recovery of Loan Funds

If the Agency determines that any loan funds are being misspent or improperly held by the loan

recipient, the Agency or the Office of the Illinois Attorney General shall have the authority to

recover those funds and take any action authorized by law, including, but not limited to, Section

58.15(b)(6) of the Act.

Section 886.330

Indemnification

The loan recipient, rather than the Agency, shall assume the entire risk, responsibility and

liability for any and all loss or damage to property owned by the loan recipient, the Agency, or

third persons, and any injury to or death of any persons (including employees of the loan

recipient) caused by or arising out of, or occurring in connection with, the execution of any work,

contract or subcontract arising out of the loan. The loan recipient shall indemnify, save harmless

and defend the State and the Agency from all claims for any such loss, damage, injury or death.

However, a loan recipient=s execution of a loan agreement, or implementation of an approved

project, does not, in itself, render the loan recipient an owner or operator for purposes of 415

ILCS 5/22.2(h)(2), or under regulations promulgated pursuant to 415 ILCS 55/8 [35 Ill. Adm.

Code Part 620]. The loan recipient shall require any contractor or subcontractor engaged by the

loan recipient to agree in writing to look solely to the loan recipient for performance of its

contract or subcontract with the loan recipient and for satisfaction of any and all claims arising

under the contract or subcontract.

Section 886.335

Statutory Requirements

The loan recipient is solely responsible for assuring compliance with all statutory requirements,

including, but not limited to, the Local Government Professional Services Selection Act [50

ILCS 510] and the Construction Contract Indemnification for Negligence Act [740 ILCS 35].

Section 886.340

Waiver of Procedures

Except as provided in subsection (b) below or otherwise required by law, the

Director of the Agency may waive any of the loan procedures or requirements,

either in whole or in part, by a written statement to the loan applicant, either as a

special condition of the loan or otherwise, provided the Director of the Agency

finds that the procedure or requirement to be waived is not necessary to insure the

integrity of the project, will not reduce an applicant's ability to repay the loan to

the Agency or will not, in general, weaken the financial position of the loan

recipient.

The following procedures and requirements shall not be waived:

Section 886.200 ( Scope and Availability of Loans);

Section 886.205 (Loan Issuance Criteria);

Section 886.250 (Loan Recipient Responsibilities);

Section 886.300 (Agency Action for Noncompliance with Loan

Agreements and Procedures)

Section 886.405 (Audit and Records);

Section 886.500 (Fixed Loan Rate);

Section 886.505 (Limitations on Loan Amounts);

Section 886.510 (Credit Worthiness and Financial Capability); and

Section 886.600 (Dedicated Source of Revenue, Security and Collateral).

SUBPART D: ACCESS, AUDIT AND RECORDS

Section 886.400

Access

The Agency or any authorized representative shall have access to the premises

where any portion of the project for which the loan was awarded is being

performed, both during normal business hours and at any other time project-

related work is being performed.

The Agency or any authorized representative shall have access, during normal

business hours, to the project records, as defined in Section 886.405 (Audit and

Records) of this Part, to the full extent of the loan recipient=s right to access the

project records.

If the Agency or any authorized representative is denied access in violation of this

Section, the Agency shall provide notice in writing to the loan recipient that

failure to provide access within 10 days will be cause for:

Termination of the loan pursuant to Section 886.305 (Loan Termination by

the Agency) of this Part;

Refund to the State of any unexpended loan funds in the possession of the

loan recipient; and

Refund of any loan funds previously expended by the loan recipient,

contractor or subcontractor found in noncompliance with this Section.

Section 886.405

Audit and Records

The loan recipient shall maintain books, records, documents, reports and other

evidentiary material, using accounting procedures and practices that conform to

Generally Accepted Accounting Principles as established by the Financial

Accounting Standards Board, an independent organization, to account properly

for:

The receipt and disposition by the loan recipient of all financial assistance

received for the project, including both State assistance and any local

share; and

The costs charged to the project for which the loan has been awarded,

including all direct and indirect costs of whatever nature incurred in

performance of the project.

The loan recipient=s facilities, or such facilities as may be engaged in the

performance of the project for which the loan has been awarded, and the loan

recipient=s records, shall be subject to inspection and audit by the Agency or any

authorized representative at the times specified in Section 886.400 (Access) of

this Part.

The loan recipient shall preserve records and make records available to the

Agency or any authorized representative:

For a period of 3 years from the date of final payment under the loan, or

for a longer period if required by applicable statute or regulation;

For records relating to loan work that has been terminated, for a period of

3 years from the date of termination; or

For records relating to disputes and/or appeals, litigation or the settlement

of claims arising out of the performance of the project for which the loan

was awarded, or costs and expenses of the project to which exception has

been taken by the Agency or any of its duly authorized representatives,

until disposition of such appeals, litigation, claims or exceptions.

Section 886.410

Single Audit Act

The loan recipient shall comply with the provisions of the Single Audit Act of 1996 (31 USC

7501).

SUBPART E: INTEREST RATES, LOAN LIMITATIONS, CREDIT WORTHINESS AND

FINANCIAL CAPABILITY

Section 886.500

Fixed Loan Rate

The fixed loan rate is comprised of an interest rate and a loan support rate. The fixed loan rate

charged for a brownfields redevelopment loan shall be a simple annual rate at one-half the

market interest rate, but not less than 2.50%.

Section 886.505

Limitations on Loan Amounts

The maximum loan amount for site investigation activities shall not exceed

$120,000 per site.

The maximum loan amount for any single application submitted pursuant to

Section 886.215 (Applications for Brownfields Redevelopment Loans) of this Part

shall be limited to $500,000.

The maximum loan amount for any single project shall be $1,000,000.

(Section

58.15(b)(3) of the Act)

Section 886.510

Credit Worthiness and Financial Capability

The loan applicant shall demonstrate to the Agency that it has the necessary legal,

financial and managerial capability to:

Retire the loan; and

Meet any covenants and requirements in the loan agreement.

The Agency may suggest mitigative measures to improve the loan applicant's

financial capability to undertake the project, including, but not limited to,

acquisition of grant funding, reduction of project costs, additional or different

sources of dedicated revenues and changes to existing financial practices that may

threaten generation of adequate revenues.

The Agency may require a loan repayment period of less than the 5 year

maximum. In evaluating the appropriateness of alternative loan terms, the Agency

shall consider such factors as the scope of the proposed project, the impacts of

alternative loan terms on user fees, and the overall cost of the project.

SUBPART F: DEDICATED SOURCE OF REVENUE, REPAYMENT AND DELINQUENCY

Section 886.600

Dedicated Source of Revenue, Security and Collateral

Units of local government shall be required to secure the loan repayment

obligation by pledging and dedicating a source of revenue to make loan

repayments. Prior to loan approval, the Agency shall review the proposed

dedicated and pledged revenue source to assure that it will generate revenues

adequate to make the loan repayments and will provide a continuing source of

revenue adequate to make loan repayments for the term of the loan. If the source

of revenue is pledged in a subordinate position to a revenue bond ordinance, the

covenants regarding coverage and reserve for the revenue source shall be identical

to those in the revenue bond ordinance.

The necessary legislative enactments to dedicate and pledge the source of revenue

must be in place before the Agency can make the first loan disbursement.

Units of local government shall establish an account, maintained by a bank or

trust, that is restricted to use for loan repayment, in which to deposit the dedicated

revenues prior to the time of first loan disbursement.

Units of local government shall, for the term of the loan, review and adjust the

dedicated source of revenue as necessary to provide adequate funds for the

repayment of the loan. The unit of local government shall timely notify, and

submit to the Agency for approval, all proposed changes to the dedicated source

of revenue.

The unit of local government shall submit to the Agency, upon request, a

statement on the status of the restricted account after initiation of the loan

repayment period that contains the status of the dedicated revenue account,

including the projected revenues, actual revenues fund balance, debt service

obligations and other requirements of the loan agreement. The Agency's approval

will be based on, but not limited to, ensuring that the revised dedicated source of

revenue is legally authorized, generates sufficient revenue and is otherwise in

accordance with this Part.

In the event that the actual revenues fall short of the amount required to retire the

loan, the Agency shall have the authority to require the unit of local government

to re-examine the dedicated revenue source and restructure it as necessary.

Private parties shall be required to secure the loan repayment obligation by

pledging and dedicating security or collateral sufficient in value to secure the full

amount of the loan.

Section 886.605

Loan Repayment to the Agency

Loan repayment to the Agency shall be in accordance with the loan repayment provisions

contained in the loan agreement.

Loan repayment shall commence within 12 months after the initial disbursement

of funds by the Agency.

The Agency shall set a principal amount and give the loan recipient an interim

repayment schedule.

After a final cost review of the project, the Agency shall establish the final

principal amount and give the loan recipient a final repayment schedule.

Section 886.610

Delinquent Loan Repayments

If a repayment is not made according to the repayment schedule, the loan recipient

shall notify the Agency in writing within 15 days after the repayment due date.

The notification shall state the reasons the repayment was not timely tendered and

the circumstances under which the late repayment will be satisfied, and shall

contain binding commitments to assure future repayments. After receipt of this

notification, the Agency shall accept the plan or take action in accordance with

subsection (b) below.

If a loan recipient fails to comply with subsection (a) above, the Agency shall

promptly issue a notice of delinquency to the loan recipient and require a written

response within 15 days. The notice of delinquency shall require the loan recipient

to take specified actions as may be appropriate to remedy the delinquency and to

assure future repayments.

In the event that the loan recipient fails to timely or adequately respond to a notice

of delinquency, or fails to meet any obligations pursuant to subsections (a) and (b)

above, the Agency may impose against the loan recipient any of the sanctions set

forth in Section 886.300 (Agency Action for Noncompliance with Loan

Agreements and Procedures) of this Part, including, but not limited to, termination

of the loan.

The Agency shall have the authority to impose a late payment fee on individual

loan repayments that are deemed delinquent by the Agency in accordance with the

procedures set forth in this Section. The late payment fee shall be an amount equal

to twice the fixed loan rate, as stated in the loan agreement, multiplied by the

delinquent loan repayment amount. The late payment fee may be assessed

commencing on the date that the Agency deems the individual loan repayment to

be delinquent in accordance with this Section, and may be assessed for each 30-

day period that the individual repayment remains delinquent.