Section 340.10  Purpose and Definitions

 

a)         Purpose

 

1)         This Part implements the Local Food Infrastructure Grant Act creating the Local Food Infrastructure Grant Program for the development of local food processing, aggregation and distribution.

 

2)         Subject to appropriation, monies shall be deposited to the Local Food Infrastructure Grant Fund. The Illinois Department of Agriculture or a nonprofit organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code and that represents farmers, and is subcontracted by the Department for this purpose, shall administer fund and grant awards.

 

b)         Definitions

 

"Act" means the Local Food Infrastructure Grant Act [505 ILCS 92].

 

"Collaborative" or "Collaboration" means two or more entities working together on a project.

 

"Community" means the county the project is located in and its contiguous counties.

 

"Department" means the Illinois Department of Agriculture or its designee for administering this program.

 

"Entity" means a business organization incorporated or registered to do business in Illinois, government entities, and educational institutions.

 

"Established" means an entity that has been doing business in the agricultural or food sectors for at least three years.

 

"Farm" means any place from which $1,000 or more of agricultural products were raised and sold, or would have been raised and sold, during the previous year, but for an event beyond the control of the farmer or rancher.

 

"Farmer" means an agricultural producer that operates a farm or ranch and significantly engages, as an occupation, in farming operations for the purpose of producing a farm crop.

 

"Financial Information" means assets, liabilities as defined in the Act, account statements from the financial institution used by the entity for each of the 12 months preceding the application, profit and loss statements, any financial audit of the entity conducted in the two years preceding application, and any other information noted on the application or instructions as required by the grant administrator.

 

"Food Business" or "Food Sector Business" means institutions engaged in producing, processing, distributing, and selling foods; or the business of production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming and agricultural related industries.

 

"GATA" means the Grant Accountability and Transparency Act [30 ILCS 708].

 

"Gross Cash Farm Income" or "GCFI" means the farm's annual income before expenses.  Annual income includes, but is not limited to, sale of crops, sale of livestock, farm-related goods and services, cash receipts, farm-related income, and production contract fees.

 

"High-Need" means the project is:

 

filling a gap in critical infrastructure for its region or community that is unlikely to be resolved without the grant investment; or

 

the grant investment will primarily serve underserved farmers and underserved communities.

 

"Illinois Cooperative" means a co-operative association organized under the Agriculture Co-Operative Act [805-ILCS 315] or the Co-operative Act [805 ILCS 310] or a limited worker cooperative association organized under the Limited Worker Cooperative Association Act [805 ILCS 317]. 

 

"Illinois Resident" means an entity that is registered to do business in Illinois and has its home-base of operations in Illinois as proven by a valid W9.

 

"Long Term Economic Development" means sustained efforts aimed at improving the economic well-being and quality of life in a community or region over a period of time exceeding two years, with the overall goal of a resilient economy that can adapt to changes and provide opportunities to all residents.

 

"Match" means funds of comparable investment in the project by the recipient of the award. Methods of providing comparable investment and acceptable providers of matching funds are as described in the Act at 505 ILCS 92/15(3).

 

"Material and Substantial Participation" means day to day involvement with the labor and management of the farm or ranch such that without this participation, the operation of the farm or ranch would be seriously impaired.

 

"Production Agriculture" means the cultivation of corn, soybeans, and forage crops, and rearing of animals.

 

"Rancher" means a type of farmer that focuses on raising livestock.

 

"Small Farm" shall have the same meaning as in the United States Department of Agriculture Census of Agriculture:  a commercial or noncommercial farm operation with a gross cash farm income (GCFI) of less than $350,000.

 

"Small Food Sector Business" means an entity, operating as a food business or in the food sector as defined above, that is independently owned and operated. Grocery stores, franchised businesses, or restaurants with more than three locations, regardless of shared ownership, are not considered a Small Food Sector Business. 

 

"Very Small Farm" shall have the same meaning as in the United States Department of Agriculture Census of Agriculture:  a commercial or noncommercial farm operation with annual sales of $2,500 or less.

 

Section 340.20  Grantee Eligibility

 

a)         Requirements for an entity to be eligible for a grant in addition to the requirements in the Act, are:

 

1)         The entity must be an Illinois resident.  [505 ILCS 92/20(c)]

 

2)         Applicants must comply with all relevant State and federal laws and rules, including prevailing wage requirements, when applicable.

 

3)         To be eligible for a grant award, an applicant shall have an active GATA registration and be qualified on the GATA Grantee Portal and SAM.gov at the time the application is submitted.

 

4)         The entity must store, process, package, aggregate or distribute value-added agricultural products or plan to do so, and must be one of the following [505 ILCS 92/15(1)]:

 

i)          An Illinois farm with fewer than 50 employees [505 ILCS 92/15(1)(A)].

 

ii)         An Illinois cooperative with fewer than 50 employees [505 ILCS 92/15(1)(B)].

 

iii)        An Illinois slaughter and/or processing facility with fewer than 50 employees [505 ILCS 92/15(1)(C)]. Slaughter and/or processing facilities must be USDA or state licensed or be a custom exempt slaughter and/or processing facility.

 

iv)        An Illinois food business with fewer than 50 employees [505 ILCS 92/15(1)(D)].

 

v)         An Illinois food hub with fewer than 50 employees [505 ILCS 92/15(1)(E)].

 

vi)        An Illinois nonprofit organization [505 ILCS 92/15(1)(F)].

 

vii)       A unit of local government in Illinois [505 ILCS 92/15(1)(G)].

 

b)         Eligible applicants include individuals, groups, partnerships, or collaborations [505 ILCS 92/15(1)].

 

c)         Collaborative project applicants must identify which entity is the lead. Lead entities for collaborative project applicants will be responsible for all grant reporting requirements.

 

d)         Restrictions:

 

1)         An entity whose project is funded in a grant cycle is not eligible to apply for grant funding for that project in the next funding cycle, nor is any other person eligible to apply for grant funding for the same project in the next funding cycle. [505 ILCS 92/15(1)]

 

2)         The immediate family or household member of any grant administrator may not apply.

 

Section 340.30  Proposal Eligibility

 

a)         Allowable Costs

 

1)         All grant funding must be used for purchasing, leasing to own, renting, building or installing infrastructure related to the processing, storage, aggregation, or distribution of value-added agricultural products. [505 ILCS 92/15(4)]

 

2)         Allowable expenses include, but are not limited to, costs to purchase, lease, or install:

 

A)        Equipment used in the production of value-added agricultural products [505 ILCS 92/15(4)(A)].

 

B)        Sanitizing equipment.

 

C)        Milling or pressing equipment [505 ILCS 92/15(4)(B)].

 

D)        Honey processing equipment and packaging including mini extractors lines, extractors, uncappers, dehydrators, creamers, warmers, heated sumps, bottling tanks and bottlers.

 

E)        Syrup processing equipment and packaging including syrup evaporators, cookers, finishers, canners and bottlers.

 

F)         Creamery or milk product processing and packaging equipment [505 ILCS 92/15(4)(C)].

 

G)        Food hub development or expansion [505 ILCS 92/15(4)(D)].

 

H)        Cooler walls, freezers and refrigeration units [505 ILCS 92/15(4)(E)].

 

I)         Grading, packing, labeling, packaging, or sorting equipment [505 ILCS 92/15(4)(F)].

 

J)         Refrigerated trucks [505 ILCS 92/15(4)(G)].

 

K)        Custom exempt mobile slaughter units that meet all Federal and State regulations, including being licensed as an IDOA Type II slaughter/processing facility [505 ILCS 92/15(4)(H)].

 

L)        Livestock, meat, and poultry, processing equipment (including fixtures or equipment necessary to expand animal throughput, processing capacity, the amount or type of products produced or processing speed, equipment necessary for compliance with federal hazard analysis and critical control point (HACCP) plan) [505 ILCS 92/15(4)(H)].

 

M)       Agroforestry processing equipment [505 ILCS 92/15(4)(I)].

 

N)        Local fish, wild caught fish, and shrimp processing [505 ILCS 92/15(4)(J)].

 

O)        Aquaponic and or hydroponic equipment.

 

P)         Equipment for school meal scratch cooking (including, but not limited to refrigerators, freezers, ovens (convection, combi, or steamer), warming/holding equipment, serving tables (hot or cold), milk coolers, or dish machines.

 

3)         Grant funding may only be used for the project as described in the application.

 

b)         Ineligible costs. Grant funding cannot be used for any of the following parts of a proposal:

 

1)         Labor, marketing, or promotion or for the costs of production agriculture, including the costs for the purchase of hoop houses, irrigation, breeding, animal housing or other infrastructure related to starting or increasing agricultural production. [505 ILCS 92/15(4)]

 

2)         Wages or travel costs.

 

3)         Portions of a project that have already received funding or been reimbursed by another federal or state grant program.

 

4)         Purchase or rental of a building or facility.

 

5)         Land acquisition or associated fees.

 

c)         Grant funding cannot be used to recoup previously-spent money on the project.

 

d)         Grant funding can only be used for expenses incurred after the date of the application.

 

Section 340.40  Award Amounts

 

a)         All awards are subject to appropriation.

 

b)         Potential amounts for each type of grant proposal, subject to appropriation and number of applicants, are:

 

1)         A collaborative project is eligible for a grant of $1,000-$250,000 [505 ILCS 92/15(2(A)]. In a collaborative project, only the entity identified as the lead in the application will receive the grant funds.

 

2)         An individual project is eligible for a grant of $1,000-$75,000 [505 ILCS 92/15(2(B)].

 

c)         Matching Funds or Comparable Investments

 

1)         Matching funds (i.e. comparable investments) are not required for high need projects.

 

2)         All other projects require a 25% match.

 

A)        The recipient's comparable investments may be provided in cash, cash-equivalent investments, bonds, irrevocable letters of credits, time and labor, or any combination of those matching fund sources.

 

B)        Acceptable providers of matching funds include, but are not limited to, commercial, municipal, and private lenders; leasing companies; and grantors of funds. [505 ILCS 92/15(3)]

 

Section 340.50  Application

 

a)         Application Process

Instructions for submitting a grant application, including format, a blank application, and due date, will be published on the grant administrator's website.

 

b)         Applicants shall provide the following information about the proposed project, and any other information required in the application:

 

1)         Names of businesses involved in the project.

 

2)         Names of businesses owners.

 

3)         Addresses of business owners.

 

4)         Occupations of business owners.

 

5)         Identification of which business and/or owner is the primary contact for and owner of the project, if multiple entities are working together.

 

6)         Relevant credit and financial information (including, but not limited to, assets and liabilities). [505 ILCS 92/20(c)]

 

7)         Length of time business has been in operation.

 

8)         Length of time project has been in existence.

 

9)         Whether the applicant has received government-funding for any part of this project already, and if they have, the following information about the funding:

 

A)        When it was received.

 

B)        The dollar amount of funding received.

 

C)        What part of the project received this funding.

 

D)        Whether the funds were disbursed as a grant or a loan.

 

E)        The agency disbursing the funds.

 

10)       Whether the applicant has applied for other government-funding for this project that is pending at the time of their application for this grant, and if they have, the following information about that application:

 

A)        When the application was submitted.

 

B)        The dollar amount of funding requested by the applicant.

 

C)        What part of the project the funds were intended to support.

 

D)        The agency disbursing the funds.

 

11)       Whether the applicant believes their project meets the definition of "high need" as defined in these rules.

 

12)       A proposed budget for the project, outlining anticipated or estimated costs of supplies or equipment for the project. If matching funds will be utilized, the budget should also include the matching funds and the source of the matching funds.

 

13)       A notarized statement that the application is complete and accurate to the best of the applicant's knowledge.

 

14)       Other information deemed necessary by the grant administrator for review of the grant application.

 

15)       For collaborative projects, the applicant must also provide the following:

 

A)        A description of the relationship between the entities involved.

 

B)        Information identifying how long the entities have worked together.

 

C)        A summary of any prior projects the entities have collaborated on and the projects' outcomes.

 

c)         Potential Changes to Application

Between submission of the application and receipt of a determination from the grant administrator, applicants have a duty to promptly disclose, in writing, to the grant administrator, any material changes related to the proposal or project or financial information provided in their application.

 

Section 340.60  Application Evaluation Criteria

 

a)         Projects will be evaluated by the grant administrator based on the following considerations:

 

1)         Reasonable assurance of increasing the availability and accessibility of Illinois agricultural products among Illinois communities [505 ILCS 92/20(d)(1)].

 

2)         Adequate and realistic budget projection [505 ILCS 92/20(d)(2)].

 

3)         Eligibility requirements.

 

4)         Cost eligibility.

 

b)         Points will be awarded for:

 

1)         Proposals that have established favorable community support [505 ILCS 92/20(e)(1)].

 

2)         Proposals that increase the availability of Illinois agricultural products to underserved communities in Illinois [505 ILCS 92/20(e)(2)].

 

3)         Proposals that positively impact underserved farmers in Illinois [505 ILCS 92/20(e)(3)].

 

4)         Proposals from established farmers and food businesses [505 ILCS 92/20(e)(4)].

 

5)         Proposals that facilitate long-term economic development in the local food sector [505 ILCS 92/20(e)(5)].

 

6)         Proposals that demonstrate comparable investments by the anticipated recipient [505 ILCS 92/20(e)(6)].

 

7)         Proposals for high need projects [505 ILCS 92/20(e)(7)].

 

8)         Proposals that are submitted by small and very small farms and food businesses [505 ILCS 92/20(e)(8)].

 

9)         Proposals from organizations led by historically underserved farmers and food business owners.

 

c)         Sufficient Documentation. The following are examples of documentation that will be deemed sufficient to establish various application requirements and criteria for points to be awarded. Substantially similar, unlisted documents identified in the application or any frequently asked questions or questions and answers for this program will also suffice.

 

1)         For proof of entity: Federal Employer Identification Number, FEIN issuance letter from the Internal Revenue Service, or registration with the Illinois Secretary of State to do business in Illinois.

 

2)         For proof of "established":  at least two types of documentation per year for at least three years, including:

 

A)        Documentation from a source other than the applicant of the date the business was started in Illinois.

 

B)        Documentation from government agencies of the business' operations or activities; tax records; media coverage describing the project or business's first actions (or prior actions so long as they meet the definition of "established" in these rules).

 

3)         For proof of "high need":

 

A)        Identification of the critical infrastructure that is needed in the community:  what it is, why it is needed, and what other projects or resources are available in the community in that space; or

 

B)        Explanation of who the proposed project will primarily serve, with specific focus on how the project will serve underserved farmers and underserved communities, and an estimate of what percentage of the project's intended beneficiaries will be underserved.

 

4)         For long-term economic development:

Documentation describing or demonstrating how the project will accomplish any of the following:

 

A)        Investment in infrastructure to support business growth;

 

B)        Training, education, and skill development in an underserved community;

 

C)        Promote environmental sustainability and responsible resource management;

 

D)        Local community involvement in decision making and or identification of specific needs; or

 

E)        Providing opportunities not currently available to individuals in underserved communities.

 

5)         For proof of the number of employees:

 

A)        Applicant's payroll logs showing how many people were paid by the applicant for each pay period for the 12 months preceding application;

 

B)        IRS Form 941 for the four quarters preceding application, Illinois Form UI-3/40 Employer's Contribution and Wage report for the four quarters preceding application; and

 

6)         For "realistic budget projection":  a budget that identifies the total amount requested; accounts for each dollar spent; and provides explanations/assumptions of how the numbers were determined, with supporting documentation for those explanations/assumptions as appropriate.

 

7)         For favorable community support:  at least two letters of support for the project or business, written in the six months preceding application, from different entities that do work in the community.  Letters of support must include:

 

A)        A summary of the relationship between the entity and the applicant;

 

B)        A description of the entity's operations and community impact;

 

C)        Address of the entity;

 

D)        Description of the geographic area the entity operates in or impacts;

 

E)        A summary of the applicant's proposed project.  This can be provided by the applicant to the entity but must be included with and or referenced in the letter; and

 

F)         Anything else identified in the application.

 

d)         High need determination and review:

 

1)         If an applicant identifies their project as "high need" and the grant administrator determines the project does not meet the definition of "high need", the grant administrator shall notify the applicant in writing of that determination and its basis.

 

2)         The applicant will have five business days from the date of that notification to inform the grant administrator in writing of whether the applicant intends to submit additional documentation. No response will be taken to mean the applicant does not intend to provide additional documentation, and the application will be denied. Applicants must identify, in that notification, whether they intend to provide matching funding or additional information to support their identification as a high need project.

 

3)         The grant administrator will acknowledge receipt of the applicant's notification and inform the applicant at that time if the notification is insufficient. If the notification is insufficient, applicant will have two business days to remedy. Grant administrator will provide written confirmation to the applicant that their notification was sufficient.

 

4)         An applicant that timely provides sufficient notification will then have 15 business days from the date of the grant administrator's confirmation of sufficiency and receipt to submit additional information to support its self-identification as high need, and or additional information to show proof of matching fund availability.  Failure to provide the documentation in the required time will result in the application being denied.

 

Section 340.70  Grant Determination and Notification

 

a)         All applicants will be notified in writing by the grant administrator that their application has been accepted or rejected.

 

b)         This notification will include the amount of funding for which the grant administrator has determined the project is eligible.

 

c)         Applications that are denied will not be held for later project review, but those applicants are not prohibited from applying in the future.

 

Section 340.80  Grant Agreement, Disbursement, and Monitoring

 

a)         Grant Agreements

 

1)         All approved projects must have a signed grant agreement to receive funding.

 

2)         The grant administrator will send a grant agreement to the awarded recipient.

 

3)         The recipient will be required to review the agreement and complete any information indicated, and return it to the grant administrator.

 

4)         When the grant administrator determines the grant agreement is completely and correctly filled out, the recipient will be notified that the agreement is ready for their signature.

 

5)         A grant agreement, signed by the recipient and the grant administrator, must be in place grant before the grantee is eligible to receive grant funding.

 

b)         Grant Disbursements

 

1)         Funds will be disbursed on a reimbursement basis.

 

2)         Grantees must submit all requests for reimbursement prior to the end of the fiscal year in which they were awarded a grant (June 30) to facilitate the most efficient and streamlined payment processing.

 

3)         Grantees that expect to continue to incur costs that are eligible for reimbursement after June 30 must notify grant administrator in writing, along with an explanation for the timing of these costs.

 

4)         Grant administrator will make best efforts to process reimbursement requests prior to August 1 of the following fiscal year. Any reimbursement request submitted after August 1, or prior to August 1 but without sufficient time for grant administrator to process, are subject to additional delays and processes to receive payment.

 

5)         If an awardee does not submit reimbursement requests for the entire amount they were awarded, the leftover amount will remain in the Fund and expended for the purposes of the Act.

 

c)         Grant Performance, Monitoring and Reporting Requirements

Grantees shall report information to the grant administrator as required in the grant agreement as well as the following information:

 

1)         Economic impact of awarded grant, including but not limited to jobs created, local food sales increased and communities served.  [505 ILCS 92/25(3)]

 

2)         Progress and financial reports on a quarterly basis, or more often as/if required in the grant agreement, along with proof of expenditures.

 

3)         All reporting required in the grant agreement.

 

Section 340.90  Miscellaneous

 

a)         False information

 

1)         Application. If the grant administrator determines an applicant included false information in their application, prior to grant award, the application will be denied. If the grant administrator determines an applicant included false information in their application and the applicant has already been awarded a grant, the grant administrator reserves the right to limit available funding, terminate the grant, and/or be reimbursed by the awardee for funds already disbursed, at the grant administrator's option.

 

2)         Required reporting. If the grant administrator determines that an awardee included false information in any of their required reporting for this grant, the grant administrator reserves the right to limit available funding, terminate the grant, and or be reimbursed by the awardee for funds already disbursed, at the grant administrator's option.

 

3)         If a grant is terminated for false information or an application is denied for containing false information, that applicant shall not be eligible for future iterations of the grant for a period of at least three years.

 

b)         If the grant administrator determines an awardee received funding from another government entity or grant program for the same project as was awarded funds under the Act, the grant administrator reserves the right to limit available funding, terminate the grant, and or be reimbursed by the awardee for funds already disbursed, at the grant administrator's option.

 

c)         Nothing in this Part is intended to confer a property or other right, duty, privilege, or interest entitling an applicant to an administrative hearing upon denial of an application.

 

d)         The grant administrator reserves the right to conduct site visits of grantees to verify the accuracy of grant reporting and verify progress of the grant project. Grant recipients shall cooperate with any grant administrator site visit during the grantee's typical operating hours and days, and permit entry without unreasonable or undue delay.

 

Section 340.100  Noncompliance and Termination

 

In addition to the default and termination provisions found in the Act, the following conditions apply:

 

a)         A grantee that does not maintain an active GATA account as required will receive one written warning from the grant administrator. If the grantee does not take steps to address its GATA account and provide timely proof of such to the grant administrator upon request, the grant administrator reserves the right to limit available funding, terminate the grant, and or be reimbursed by the awardee for funds already disbursed, at the grant administrator's option.

 

b)         If a grantee does not communicate or respond to the grant administrator as required, the grantee will receive one written warning from the grant administrator. If the grantee fails to respond to the grant administrator within five business days of that warning, the grant administrator reserves the right to limit available funding, terminate the grant, and or be reimbursed by the awardee for funds already disbursed, at the grant administrator's option.