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| Leading Illinois Federal, State & Local Government Law Attorneys |
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Federal Financing
The federal government offers a number of assistance programs primarily through an organization called the Small Business Administration (SBA). Created by Congress in 1953 to help small businesses, the SBA provides financial, procurement, advocacy and management assistance. Every year, the SBA guarantees bank loans totaling over three billion dollars for small businesses. Small businesses that qualify for SBA loans usually can receive far more favorable terms than they would otherwise be able to get. Most SBA loans are for a lengthy period of time and qualify for a relatively low interest rate. Despite their advantages, SBA loans are not right for all businesses: the SBA loan process usually takes longer than the conventional loan process, the SBA can require more personal guarantees and collateral, and the SBA sometimes restricts a business' ability to get additional financing as a pre-condition to the SBA loan.
State Financing
In Illinois there are various public sources of financing under the direction of the Illinois Department of Commerce and Community Affairs (DCCA). As the state's lead economic development agency, DCCA is committed to helping the state maintain the best possible climate in which to own or operate a business. Its First-Stop Business Information Center is designed to help answer questions about starting or expanding a business.
Other sources of financing from the state include the Certified Lender Program; Small Business Development Loan Program; Illinois Expert Finance Partnership; Surety Bond Guaranty Program; Business Development Public Infrastructure Program; Enterprise Zone Program; Business Expansion; Detention and Location Assistance; Illinois Small Business Development Center Network; and the Minority, Union, and Disability Business Loan Program. Each of these programs has its own standards for determining who qualifies for economic assistance and how much money is available for which ventures. Information on all of them is available from the DCCA.
Local Financing
Many local government units provide assistance in various forms to new businesses. Some offer technical assistance or financial services, while others offer tax credits or loan packaging assistance. A program assisting local government with financing is the Community Development Assistance Program while the Community Development Support Unit provides technical assistance to local governments. A businessperson interested in programs offered in a given area should contact the business services or planning unit of the county or city in which the business is or will be located.
On the federal level, each individual federal agency receives requests for bids from small businesses. To receive copies of various federal agencies' requests for bids, a business files an application with each federal agency that the business wants to do business with. Many of these federal agencies have special programs specifically designed to assist small and minority-owned businesses because regulations require that a certain percentage of all government contracts be reserved for small or minority-owned businesses. The SBA provides assistance to small businesses in this regard by publishing a list called the Small Business Subcontracting Directory. The directory lists the major contractors to the federal government and which are most likely to be in need of subcontracting.
One of the missions the SBA takes most seriously is its goal of management assistance. To this end, the SBA offers a number of different programs that businesses can turn to for advice in such areas as marketing, buying, financial management and administration. Among these programs is the Service Corps of Retired Executives (SCORE), which puts small businesses in touch with retired executive volunteers who offer counseling and advice. The SBA's Office of Procurement Assistance helps businesses get information and develop strategies concerning selling to the federal government. The SBA also lobbies Congress and other federal organizations on behalf of small businesses.
There are several other government agencies that a small business should be aware of. For example, the various branches of the armed services offer assistance to businesses in securing defense-related contracts. The U.S. Army maintains an office known as the Defense Logistics Agency to assist small businesses with contracts. Also, the General Services Administration (GSA) helps businesses that want to sell their products directly to the government by providing information on which government agencies wish to purchase products.
There are laws governing lobbying at both the state and federal level, including requirements for lobbyists to identify the clients on whose behalf they lobby. Lobbyists who lobby the United States Congress are governed by federal lobbyist registration statutes. These laws require lobbyists to maintain and periodically file with the Clerk of the House of Representatives detailed records of major contributors and all expenditures made by the lobbyist or lobbying organization. Lobbyists are also required to register with both the Secretary of the Senate and the Clerk of the House of Representatives.
Lobbyists who lobby the Illinois General Assembly must register with the Illinois Secretary of State. They also must inform the Secretary of State about themselves and about the party they intend to represent to the General Assembly. Lobbyists must report biannually to the Secretary of State about their expenditures. Supervision and enforcement of these regulations have become tighter in recent years.
Many law firms have attorneys who specialize in lobbying. In addition, there are non-legal political consulting firms available to perform lobbying services. Their employees are often experts at influencing government.
The Limited Role of Administrative Agencies
It is easier to understand the role of administrative agencies if one understands their constitutional limitations. Theoretically, it is Congress that makes all federal laws and the Illinois General Assembly that makes state laws. Realistically, it would be impossible for either of these two legislative bodies to handle every detail of the laws they create. Legislatures are forced to rely heavily on the advice of numerous administrative agencies in suggesting new laws and implementing existing laws. Frequently, Congress or the state legislature establishes an agency, gives it broad outlines to follow in regulating an industry, then delegates to that agency the power to make rules that industry must follow.
There are limits on how much authority Congress or the state legislature can delegate to administrative agencies. Once they are created, federal agencies must follow the federal Administrative Procedure Act and state agencies must follow the Illinois Administrative Procedure Act. The statutes creating the agency can sometimes be attacked as an overly broad delegation of legislative power or a particular agency action can be attacked as overstepping the proper bounds of the agency's authority. Thus, an important first step in challenging an agency action is to ask whether the agency has been properly delegated power and whether that power is being properly exercised. The next step in challenging an administrative action is to ask whether the agency has followed the procedures required by the federal or state Administrative Procedure Act.
The Administrative Process
Understanding how agencies work is easier if one understands that all agency actions must fit into one of three broad categories--rulemaking, adjudication, or informal agency action. Each of these categories has unique rules that apply to it, and each offers affected parties a different degree of input into the agency's decision making process. Thus, the first step for any business wanting input into a particular agency action is to determine which category the action fits into. The determination of what to call the agency action is rarely simple. The category that the particular action fits into determines how many procedural safeguards the agency must observe. An agency may try to avoid the cumbersome procedure required for one type of action by trying to fit it into another category of administrative action that requires less formal procedure. Many legal disputes over agency action have centered around how to characterize what the agency is doing, rather than the actions themselves.
Rulemaking is usually done quite informally after a period of notice and comment. An agency gives notice that it is considering adopting a proposed rule and gives notice to interested parties that may want to comment on the rule. The agency considers the comments and then can promulgate a final rule. Commenting on a proposed rule is one of the most direct ways in which businesses can have a voice in formulating new rules. Unfortunately, an agency is not required to heed comments received. Because the agency is not required to follow any of the comments received, an affected party often will try to argue that what the agency is doing is not rulemaking at all, but instead is adjudication. In a few instances, a new rule can only be made after the agency follows detailed procedures known as formal rulemaking.
Adjudication is a procedure very much like a civil court trial. Court rules and agency rules are not identical, but agency adjudication allows for direct examination of witnesses, testimony under oath before an administrative law judge and the development of a substantial written record upon which the agency's decision must be based.
Informal agency action is a very broad category in which the procedures vary considerably. Parties to informal agency action often have minimal procedural protection. For example, an agency might merely be required to give the reason for taking a particular action. It need not allow for public comments or other input into the process.
The Role of Courts
Although most administrative decisions are subject to judicial review, few are ever overturned on review. At the federal level, the Supreme Court has sent very strong signals to lower courts that they are not to overturn agency decisions absent very strong evidence that the agency acted erroneously. A business manager would be foolish to treat administrative agencies lightly because he or she assumes that a reviewing court will correct any mistakes the agency might make. The ability of reviewing courts to overturn agency action is so limited that the only sensible strategy is to assume that a case must be won at the agency level or not at all.
Freedom of Information Act
The Federal Administrative Procedure Act gives individuals, businesses, and organizations a very powerful tool to use in obtaining information from government agencies--the Federal Freedom of Information Act (FOIA). The FOIA gives unprecedented access to government information. Under FOIA, an agency must make available to the public:
FOIA requests are usually made in writing to the agency. Most agencies process so many FOIA requests that they have designated an officer to process the requests. The Code of Federal Regulations publishes the names and addresses of FOIA contacts in many agencies. Procedures for seeing these documents are very informal and no written request is necessary. The party making the request is obligated to describe the records reasonably well and to pay photocopying and search fees. Frequently requested documents may be made available at established Information Reading Rooms.
General Services Administration, Region 5, Kluczynski Federal Building, 230 South Dearborn Street, #3700, Chicago, IL 60604, phone: (312) 353-5395, fax: (312) 886-5595.
U.S. Government Purchasing and Sales Directory, United States Small Business Administration. The SBA offers government publications on all aspects of business planning and organization, which are available by sending a self-addressed stamped envelope to the Small Business Administration Office of Procurement and Technical Assistance, P.O. Box 15434, Fort Worth, Texas 76119.
The Entrepreneur's Guide to Doing Business with the Federal Government: A Source Book for Small and Growing Businesses, Charles R. Bevers et al., Prentice Hall, New York, NY, 1989.
Getting Started in Federal Contracting: A Guide Through the Federal Procurement Maze, Barry L. McVay, Panoptic Enterprises, Woodbridge, VA, 3rd ed., 1995.
Proposals That Win Federal Contracts: How to Plan, Price, Write, and Negotiate to Get Your Fair Share of Government Business, Barry L. McVay, Panoptic Enterprises, Woodbridge, VA, 1989.
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