Bill Text: IL SB3719 | 2009-2010 | 96th General Assembly | Enrolled
Bill Title: Amends the Illinois Finance Authority Act concerning agricultural assistance. Authorizes the Authority to insure and make advance commitments to insure payments on bonds issued for agricultural assistance. Authorizes the Authority to issue State Guarantees to lenders for working capital loans to finance planting and raising agricultural commodities. Sets forth eligibility, application, and renewal requirements. Establishes fees and loan limits. Contains other provisions. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Passed) 2010-05-24 - Public Act . . . . . . . . . 96-0897 [SB3719 Detail]
Download: Illinois-2009-SB3719-Enrolled.html
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| 1 | AN ACT concerning government.
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| 2 | Be it enacted by the People of the State of Illinois,
| ||||||
| 3 | represented in the General Assembly:
| ||||||
| 4 | Section 5. The Illinois Finance Authority Act is amended by | ||||||
| 5 | changing Sections 805-5, 805-15, 805-20, 830-5, 830-35, | ||||||
| 6 | 830-45, and 830-50 and by adding Section 830-55 as follows:
| ||||||
| 7 | (20 ILCS 3501/805-5)
| ||||||
| 8 | Sec. 805-5. Findings and Declaration of Policy. It is | ||||||
| 9 | hereby found and
declared that a continuing need exists to | ||||||
| 10 | maintain and develop the State's
economy; that there are | ||||||
| 11 | significant barriers in the capital markets inhibiting
the | ||||||
| 12 | issuance by the Authority of industrial revenue bonds, loans, | ||||||
| 13 | and State Guarantees to assist in
financing
industrial | ||||||
| 14 | projects, farmers, and agribusiness in the State, particularly | ||||||
| 15 | for smaller firms; and that the
establishment of the Industrial | ||||||
| 16 | Revenue Bond Insurance Fund and the exercise by
the Authority | ||||||
| 17 | of the powers granted in
this Article will promote
economic | ||||||
| 18 | development by widening the market for the Authority's revenue | ||||||
| 19 | bonds, loans, and State Guarantees.
| ||||||
| 20 | (Source: P.A. 93-205, eff. 1-1-04.)
| ||||||
| 21 | (20 ILCS 3501/805-15)
| ||||||
| 22 | Sec. 805-15. Industrial Project Insurance Fund. There is | ||||||
| |||||||
| |||||||
| 1 | created the
Industrial Project Insurance Fund, hereafter | ||||||
| 2 | referred to in
Sections 805-15
through 805-50 of this Act as | ||||||
| 3 | the "Fund". The Treasurer shall have custody of
the
Fund, which | ||||||
| 4 | shall be held outside of the State treasury, except that | ||||||
| 5 | custody
may
be transferred to and held by any bank, trust | ||||||
| 6 | company or other fiduciary with
whom the Authority executes a | ||||||
| 7 | trust agreement as authorized by paragraph (h) of
Section | ||||||
| 8 | 805-20 of this Act. Any portion of the Fund against which a | ||||||
| 9 | charge has
been made, shall be held for the benefit of the | ||||||
| 10 | holders of the loans or bonds
insured under
Section 805-20 of | ||||||
| 11 | this Act or the holders of State Guarantees under Article 830 | ||||||
| 12 | of this Act.
There shall be deposited in the Fund such amounts, | ||||||
| 13 | including but not limited
to:
| ||||||
| 14 | (a) All receipts of bond and loan insurance premiums;
| ||||||
| 15 | (b) All proceeds of assets of whatever nature received by | ||||||
| 16 | the Authority as a
result of default or delinquency with | ||||||
| 17 | respect to insured loans or bonds or State Guarantees with
| ||||||
| 18 | respect to which payments from the Fund have been made, | ||||||
| 19 | including proceeds from
the sale, disposal, lease or rental of | ||||||
| 20 | real or personal property which the
Authority may receive under | ||||||
| 21 | the provisions of
this Article but excluding the proceeds of | ||||||
| 22 | insurance hereunder;
| ||||||
| 23 | (c) All receipts from any applicable contract or agreement | ||||||
| 24 | entered into by
the Authority under paragraph (b) of Section | ||||||
| 25 | 805-20 of this Act;
| ||||||
| 26 | (d) Any State appropriations, transfers of appropriations, | ||||||
| |||||||
| |||||||
| 1 | or transfers of
general obligation bond proceeds or other | ||||||
| 2 | monies made available to the Fund.
Amounts in the Fund shall be | ||||||
| 3 | used in accordance with the provisions of
this Article to | ||||||
| 4 | satisfy any valid insurance claim payable
therefrom and may be | ||||||
| 5 | used for any other purpose determined by the Authority in
| ||||||
| 6 | accordance with insurance contract or contracts with financial | ||||||
| 7 | institutions
entered into pursuant to this Act, including | ||||||
| 8 | without limitation protecting the
interest of the Authority in | ||||||
| 9 | industrial projects during periods of loan
delinquency or upon | ||||||
| 10 | loan default through the purchase of industrial projects in
| ||||||
| 11 | foreclosure proceedings or in lieu of foreclosure or through | ||||||
| 12 | any other means.
Such amounts may also be used to pay | ||||||
| 13 | administrative costs and expenses
reasonably allocable to the | ||||||
| 14 | activities in connection with the Fund and to pay
taxes, | ||||||
| 15 | maintenance, insurance, security and any other costs and | ||||||
| 16 | expenses of
bidding for, acquiring, owning, carrying and | ||||||
| 17 | disposing of industrial projects
which were financed with the | ||||||
| 18 | proceeds of insured bonds or loans. In the case of
a default in | ||||||
| 19 | payment with respect to any loan, mortgage or other agreement | ||||||
| 20 | so
insured, the amount of the default shall immediately, and at | ||||||
| 21 | all times during
the continuance of such default, and to the | ||||||
| 22 | extent provided in any applicable
agreement, constitute a | ||||||
| 23 | charge on the Fund.
Any amounts in the Fund not currently | ||||||
| 24 | needed to meet the obligations of the
Fund may be invested as | ||||||
| 25 | provided by law in obligations designated by the
Authority,
and | ||||||
| 26 | all income from such investments shall become part of the Fund. | ||||||
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| |||||||
| 1 | In making
such investments, the Authority shall act with the | ||||||
| 2 | care, skill, diligence and
prudence under the circumstances of | ||||||
| 3 | a prudent person acting in a like capacity
in the conduct of an | ||||||
| 4 | enterprise of like character and with like aims. It shall
| ||||||
| 5 | diversify such investments of the Authority so as to minimize | ||||||
| 6 | the risk of large
losses, unless under the circumstances it is | ||||||
| 7 | clearly not prudent to do so.
Amounts in the Fund may also be | ||||||
| 8 | used to satisfy State Guarantees under Article 830 of this Act.
| ||||||
| 9 | (Source: P.A. 93-205, eff. 1-1-04; 94-91, eff. 7-1-05.)
| ||||||
| 10 | (20 ILCS 3501/805-20)
| ||||||
| 11 | Sec. 805-20. Powers and Duties; Industrial Project | ||||||
| 12 | Insurance Program. The
Authority has the power:
| ||||||
| 13 | (a) To insure and make advance commitments to insure all or | ||||||
| 14 | any part of the
payments required on the bonds issued or a loan | ||||||
| 15 | made to finance any
environmental facility under the Illinois | ||||||
| 16 | Environmental Facilities Financing
Act
or for any industrial | ||||||
| 17 | project upon such terms and conditions as the Authority
may | ||||||
| 18 | prescribe in accordance with
this Article. The
insurance | ||||||
| 19 | provided by the Authority shall be payable solely from the Fund
| ||||||
| 20 | created by
Section 805-15 and shall not constitute a debt or | ||||||
| 21 | pledge of the full
faith and credit of the State, the | ||||||
| 22 | Authority, or any political subdivision
thereof;
| ||||||
| 23 | (b) To enter into insurance contracts, letters of credit or | ||||||
| 24 | any other
agreements or contracts with financial institutions | ||||||
| 25 | with respect to the Fund
and
any bonds or loans insured | ||||||
| |||||||
| |||||||
| 1 | thereunder. Any such agreement or contract may
contain terms | ||||||
| 2 | and provisions necessary or desirable in connection with the
| ||||||
| 3 | program, subject to the requirements established by this Act, | ||||||
| 4 | including without
limitation terms and provisions relating to | ||||||
| 5 | loan documentation, review and
approval procedures, | ||||||
| 6 | origination and servicing rights and responsibilities,
default | ||||||
| 7 | conditions, procedures and obligations with respect to | ||||||
| 8 | insurance
contracts made under this Act. The agreements or | ||||||
| 9 | contracts may be executed on
an individual, group or master | ||||||
| 10 | contract basis with financial institutions;
| ||||||
| 11 | (c) To charge reasonable fees to defray the cost of | ||||||
| 12 | obtaining letters of
credit
or other similar documents, other | ||||||
| 13 | than insurance contracts under paragraph (b).
Any such fees | ||||||
| 14 | shall be payable by such person, in such amounts and at such
| ||||||
| 15 | times
as the Authority shall determine, and the amount of the | ||||||
| 16 | fees need not be
uniform
among the various bonds or loans | ||||||
| 17 | insured;
| ||||||
| 18 | (d) To fix insurance premiums for the insurance of payments | ||||||
| 19 | under the
provisions of
this Article. Such premiums shall be
| ||||||
| 20 | computed as determined by the Authority. Any premiums for the | ||||||
| 21 | insurance of loan
payments under the provisions of this Act | ||||||
| 22 | shall be payable by such person, in
such amounts and at such | ||||||
| 23 | times as the Authority shall determine, and the amount
of the | ||||||
| 24 | premiums need not be uniform among the various bonds or loans | ||||||
| 25 | insured;
| ||||||
| 26 | (e) To establish application fees and prescribe | ||||||
| |||||||
| |||||||
| 1 | application, notification,
contract and insurance forms, rules | ||||||
| 2 | and regulations it deems necessary or
appropriate;
| ||||||
| 3 | (f) To make loans and to issue bonds secured by insurance | ||||||
| 4 | or other
agreements
authorized by paragraphs (a) and (b) of | ||||||
| 5 | this
Section 805-20 and to issue bonds
secured by loans that | ||||||
| 6 | are guaranteed by the federal government or agencies
thereof;
| ||||||
| 7 | (g) To issue a single bond issue, or a series of bond | ||||||
| 8 | issues, for a group of
industrial projects, a group of | ||||||
| 9 | corporations, or a group of business entities
or
any | ||||||
| 10 | combination thereof insured by insurance or backed by any other | ||||||
| 11 | agreement
authorized by paragraphs (a) and (b) of this
Section | ||||||
| 12 | or secured by loans that
are guaranteed by the federal | ||||||
| 13 | government or agencies thereof;
| ||||||
| 14 | (h) To enter into trust agreements for the management of | ||||||
| 15 | the Fund created
under Section 805-15 of this Act; and
| ||||||
| 16 | (i) To exercise such other powers as are necessary or | ||||||
| 17 | incidental to the powers granted in this Section and to the | ||||||
| 18 | issuance of State Guarantees under Article 830 of this Act
| ||||||
| 19 | foregoing.
| ||||||
| 20 | (j) At the discretion of the Authority, to insure and make | ||||||
| 21 | advance commitments to insure, and issue State Guarantees for, | ||||||
| 22 | all or any part of the payments required on the bonds issued or | ||||||
| 23 | loans made to finance any agricultural facility, project, | ||||||
| 24 | farmer, producer, agribusiness, or program under Article 830 of | ||||||
| 25 | this Act upon such terms and conditions as the Authority may | ||||||
| 26 | prescribe in accordance with this Article. The insurance and | ||||||
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| |||||||
| 1 | State Guarantees provided by the Authority may be payable from | ||||||
| 2 | the Fund created by Section 805-15 and is in addition to and | ||||||
| 3 | not in replacement of the Illinois Agricultural Loan Guarantee | ||||||
| 4 | Fund and the Illinois Farmer and Agribusiness Loan Guarantee | ||||||
| 5 | Fund created under Article 830 of this Act. | ||||||
| 6 | (Source: P.A. 93-205, eff. 1-1-04.)
| ||||||
| 7 | (20 ILCS 3501/830-5)
| ||||||
| 8 | Sec. 830-5. The Authority shall have the following powers:
| ||||||
| 9 | (a) To loan its funds to one or more persons to be used by | ||||||
| 10 | such persons to
pay
the costs of acquiring, constructing, | ||||||
| 11 | reconstructing or improving Agricultural
Facilities, soil or | ||||||
| 12 | water conservation projects or watershed areas, such loans
to | ||||||
| 13 | be on such terms and conditions, and for such period of time, | ||||||
| 14 | and secured or
evidenced by such mortgages, deeds of trust, | ||||||
| 15 | notes, debentures, bonds or other
secured or unsecured | ||||||
| 16 | evidences of indebtedness of such persons as the Board may
| ||||||
| 17 | determine;
| ||||||
| 18 | (b) To loan its funds to any agribusiness which operates or | ||||||
| 19 | will operate a
facility located in Illinois for those purposes | ||||||
| 20 | permitted by rules and
regulations issued pursuant to the | ||||||
| 21 | Internal Revenue Code of 1954, as amended,
relating to the use | ||||||
| 22 | of moneys loaned from the proceeds from the issuance of
| ||||||
| 23 | industrial development revenue bonds; such loans shall be on | ||||||
| 24 | terms and
conditions, and for periods of time, and secured or | ||||||
| 25 | evidenced by mortgages,
deeds of trust, notes, debentures, | ||||||
| |||||||
| |||||||
| 1 | bonds or other secured or unsecured
evidences
of indebtedness | ||||||
| 2 | of such agribusiness as the Board may require;
| ||||||
| 3 | (c) To purchase, or to make commitments to purchase, from | ||||||
| 4 | lenders notes,
debentures, bonds or other evidences of | ||||||
| 5 | indebtedness secured by mortgages,
deeds of trust, or security | ||||||
| 6 | devices, or unsecured, as the Authority may
determine, or | ||||||
| 7 | portions thereof or participations therein, which notes, | ||||||
| 8 | bonds,
or other evidences of indebtedness shall have been or | ||||||
| 9 | will be executed by the
obligors thereon to obtain funds with | ||||||
| 10 | which to acquire, by purchase,
construction, or otherwise, | ||||||
| 11 | reconstruct or improve Agricultural Facilities;
| ||||||
| 12 | (d) To contract with lenders or others for the origination | ||||||
| 13 | of or the
servicing
of the loans made by the Authority pursuant | ||||||
| 14 | to this
Section or
represented by the notes, bonds, or other | ||||||
| 15 | evidences of indebtedness which it
has purchased pursuant to | ||||||
| 16 | this
Section; provided that such
servicing fees shall not | ||||||
| 17 | exceed one percent per annum of the principal amount
| ||||||
| 18 | outstanding owed to the Authority; and
| ||||||
| 19 | (e) To enter into a State Guarantee with a lender or a | ||||||
| 20 | person holding a note
and
to sell or issue such State | ||||||
| 21 | Guarantees, bonds or evidences of indebtedness in a
primary or | ||||||
| 22 | a secondary market and to make payment on a State Guarantee | ||||||
| 23 | from available sources, including but not limited to, the | ||||||
| 24 | Illinois Agricultural Loan Guarantee Fund and the Illinois | ||||||
| 25 | Farmer and Agribusiness Loan Guarantee Fund created under | ||||||
| 26 | Section 830-30 and Section 830-35, respectively, and the | ||||||
| |||||||
| |||||||
| 1 | Industrial Project Insurance Fund created under Article 805 of | ||||||
| 2 | this Act.
| ||||||
| 3 | (Source: P.A. 93-205, eff. 1-1-04.)
| ||||||
| 4 | (20 ILCS 3501/830-35)
| ||||||
| 5 | Sec. 830-35.
State Guarantees for loans to farmers and | ||||||
| 6 | agribusiness;
eligibility.
| ||||||
| 7 | (a) The Authority is authorized to issue State Guarantees | ||||||
| 8 | to lenders for
loans
to eligible farmers and agribusinesses for | ||||||
| 9 | purposes set forth in this
Section.
For purposes of this
| ||||||
| 10 | Section, an eligible farmer shall be a resident of Illinois
(i) | ||||||
| 11 | who is principal operator of a farm or land, at least 50% of | ||||||
| 12 | whose annual
gross income is derived from farming, (ii) whose | ||||||
| 13 | annual total sales of
agricultural products, commodities, or | ||||||
| 14 | livestock exceeds $20,000, and (iii)
whose net worth does not | ||||||
| 15 | exceed $500,000. An eligible agribusiness shall be
that as | ||||||
| 16 | defined in
Section 801-10 of this Act.
The Authority may | ||||||
| 17 | approve applications by farmers and agribusinesses that
| ||||||
| 18 | promote diversification of the farm economy of this State | ||||||
| 19 | through the growth
and
development of new crops or livestock | ||||||
| 20 | not customarily grown or produced in this
State or that | ||||||
| 21 | emphasize a vertical integration of grain or livestock produced
| ||||||
| 22 | or
raised in this State into a finished agricultural product | ||||||
| 23 | for consumption or
use. "New crops or livestock not customarily | ||||||
| 24 | grown or produced in this State"
shall not include corn, | ||||||
| 25 | soybeans, wheat, swine, or beef or dairy cattle.
"Vertical | ||||||
| |||||||
| |||||||
| 1 | integration of grain or livestock produced or raised in this | ||||||
| 2 | State"
shall include any new or existing grain or livestock | ||||||
| 3 | grown or produced in this
State.
Lenders shall apply for the | ||||||
| 4 | State Guarantees on forms provided by the
Authority,
certify | ||||||
| 5 | that the application and any other documents submitted are true | ||||||
| 6 | and
correct, and pay an administrative fee as determined by the | ||||||
| 7 | Authority. The
applicant shall be responsible for paying any | ||||||
| 8 | fees or charges involved in
recording mortgages, releases, | ||||||
| 9 | financing statements, insurance for secondary
market issues | ||||||
| 10 | and any other similar fees or charges as the Authority may
| ||||||
| 11 | require. The application shall at a minimum contain the | ||||||
| 12 | farmer's or
agribusiness' name, address, present credit and | ||||||
| 13 | financial information,
including cash flow statements, | ||||||
| 14 | financial statements, balance sheets, and any
other
| ||||||
| 15 | information pertinent to the application, and the collateral to | ||||||
| 16 | be used to
secure the State Guarantee. In addition, the lender | ||||||
| 17 | must agree to charge an
interest rate, which may vary, on the | ||||||
| 18 | loan that the Authority determines to be
below the market rate | ||||||
| 19 | of interest generally available to the borrower. If both
the | ||||||
| 20 | lender and applicant agree, the interest rate on the State | ||||||
| 21 | Guarantee Loan
can be converted to a fixed interest rate at any | ||||||
| 22 | time during the term of the
loan.
Any State Guarantees provided | ||||||
| 23 | under this
Section (i) shall not exceed $500,000
per farmer or | ||||||
| 24 | an amount as determined by the Authority on a case-by-case
| ||||||
| 25 | basis for an agribusiness, (ii) shall not exceed a term of 15 | ||||||
| 26 | years, and (iii)
shall be subject to an annual review and | ||||||
| |||||||
| |||||||
| 1 | renewal by the lender and the
Authority; provided that only one | ||||||
| 2 | such State Guarantee shall be made per farmer
or agribusiness, | ||||||
| 3 | except that additional State Guarantees may be made for
| ||||||
| 4 | purposes of expansion of projects financed in part by a | ||||||
| 5 | previously issued State
Guarantee. No State Guarantee shall be | ||||||
| 6 | revoked by the Authority without a
90-day notice, in writing, | ||||||
| 7 | to all parties. The lender shall not call due any
loan
for any | ||||||
| 8 | reason except for lack of performance, insufficient | ||||||
| 9 | collateral, or
maturity. A lender may review and withdraw or | ||||||
| 10 | continue with a State Guarantee
on an annual basis after the | ||||||
| 11 | first 5 years following closing of the loan
application if the | ||||||
| 12 | loan contract provides for an interest rate that shall not
| ||||||
| 13 | vary. A lender shall not withdraw a State Guarantee if the loan | ||||||
| 14 | contract
provides for an interest rate that may vary, except | ||||||
| 15 | for reasons set forth
herein.
| ||||||
| 16 | (b) The Authority shall provide or renew a State Guarantee | ||||||
| 17 | to a lender if:
| ||||||
| 18 | (i) A fee equal to 25 basis points on the loan is paid | ||||||
| 19 | to the Authority on
an annual
basis by the lender.
| ||||||
| 20 | (ii) The application provides collateral acceptable to | ||||||
| 21 | the
Authority that is at least equal to the State's portion | ||||||
| 22 | of the Guarantee to be
provided.
| ||||||
| 23 | (iii) The lender assumes all responsibility and costs | ||||||
| 24 | for pursuing
legal action on collecting any loan that is | ||||||
| 25 | delinquent or in default.
| ||||||
| 26 | (iv) The
lender is responsible for the first 15% of the | ||||||
| |||||||
| |||||||
| 1 | outstanding principal of the
note
for which the State | ||||||
| 2 | Guarantee has been applied.
| ||||||
| 3 | (c) There is hereby created outside of the State treasury a | ||||||
| 4 | special fund to
be
known as the Illinois Farmer and | ||||||
| 5 | Agribusiness Loan Guarantee Fund. The State
Treasurer shall be | ||||||
| 6 | custodian of this Fund. Any amounts in the Fund not
currently | ||||||
| 7 | needed to meet the obligations of the Fund shall be invested as
| ||||||
| 8 | provided by law, and all interest earned from these investments | ||||||
| 9 | shall be
deposited into the Fund until the Fund reaches the | ||||||
| 10 | maximum amounts authorized
in
this Act; thereafter, interest | ||||||
| 11 | earned shall be deposited into the General
Revenue Fund. After | ||||||
| 12 | September 1, 1989, annual investment earnings equal to 1.5%
of | ||||||
| 13 | the Fund shall remain in the Fund to be used for the purposes | ||||||
| 14 | established in
Section 830-40 of this Act. The Authority is | ||||||
| 15 | authorized to transfer such
amounts
as are necessary to satisfy | ||||||
| 16 | claims from available appropriations and from fund
balances of | ||||||
| 17 | the Farm Emergency Assistance Fund as of June 30 of each year | ||||||
| 18 | to
the
Illinois Farmer and Agribusiness Loan Guarantee Fund to | ||||||
| 19 | secure State Guarantees
issued under this
Section and
Sections | ||||||
| 20 | 830-45, and 830-50, and 830-55. If for any reason the
General | ||||||
| 21 | Assembly fails to make an appropriation sufficient to meet | ||||||
| 22 | these
obligations, this Act shall constitute an irrevocable and | ||||||
| 23 | continuing
appropriation of an amount necessary to secure | ||||||
| 24 | guarantees as defaults occur and
the irrevocable and continuing | ||||||
| 25 | authority for, and direction to, the State
Treasurer and the | ||||||
| 26 | Comptroller to make the necessary transfers to the Illinois
| ||||||
| |||||||
| |||||||
| 1 | Farmer and Agribusiness Loan Guarantee Fund, as directed by the | ||||||
| 2 | Governor, out
of
the General Revenue Fund. In the event of | ||||||
| 3 | default by the borrower on State
Guarantee Loans under this
| ||||||
| 4 | Section,
Section 830-45, or
Section 830-50, or Section 830-55, | ||||||
| 5 | the lender
shall be entitled to, and the Authority shall direct | ||||||
| 6 | payment on, the State
Guarantee after 90 days of delinquency. | ||||||
| 7 | All payments by the Authority shall be
made from the Illinois | ||||||
| 8 | Farmer and Agribusiness Loan Guarantee Fund to satisfy
claims | ||||||
| 9 | against the State Guarantee. It shall be the responsibility of | ||||||
| 10 | the
lender to proceed with the collecting and disposing of | ||||||
| 11 | collateral on the State
Guarantee under this
Section,
Section | ||||||
| 12 | 830-45, or
Section 830-50, or Section 830-55 within 14 months | ||||||
| 13 | of
the time the State Guarantee is declared delinquent. If the | ||||||
| 14 | lender does not
dispose of the collateral within 14 months, the | ||||||
| 15 | lender shall be liable to repay
to the State interest on the | ||||||
| 16 | State Guarantee equal to the same rate that the
lender charges | ||||||
| 17 | on the State Guarantee, provided that the Authority shall have
| ||||||
| 18 | the authority to extend the 14-month period for a lender in the | ||||||
| 19 | case of
bankruptcy or extenuating circumstances. The Fund shall | ||||||
| 20 | be reimbursed for any
amounts paid under this
Section,
Section | ||||||
| 21 | 830-45, or
Section 830-50, or Section 830-55 upon liquidation
| ||||||
| 22 | of the collateral.
The Authority, by resolution of the Board, | ||||||
| 23 | may borrow sums from the Fund and
provide for repayment as soon | ||||||
| 24 | as may be practical upon receipt of payments of
principal and | ||||||
| 25 | interest by a borrower on State Guarantee Loans under this
| ||||||
| 26 | Section,
Section 830-45, or
Section 830-50, or Section 830-55. | ||||||
| |||||||
| |||||||
| 1 | Money may be borrowed from the Fund by
the Authority for the | ||||||
| 2 | sole purpose of paying certain interest costs for
borrowers | ||||||
| 3 | associated with selling a loan subject to a State Guarantee | ||||||
| 4 | under
this
Section,
Section 830-45, or
Section 830-50, or | ||||||
| 5 | Section 830-55 in a secondary market as may be deemed
| ||||||
| 6 | reasonable and necessary by the Authority.
| ||||||
| 7 | (d) Notwithstanding the provisions of this
Section 830-35 | ||||||
| 8 | with respect to the
farmers, agribusinesses, and lenders who | ||||||
| 9 | may obtain State Guarantees, the
Authority may promulgate rules | ||||||
| 10 | establishing the eligibility of farmers,
agribusinesses, and | ||||||
| 11 | lenders to participate in the State Guarantee program and
the | ||||||
| 12 | terms, standards, and procedures that will apply, when the | ||||||
| 13 | Authority finds
that emergency conditions in Illinois | ||||||
| 14 | agriculture have created the need for
State Guarantees pursuant | ||||||
| 15 | to terms, standards, and procedures other than those
specified | ||||||
| 16 | in this
Section.
| ||||||
| 17 | (Source: P.A. 93-205, eff. 1-1-04.)
| ||||||
| 18 | (20 ILCS 3501/830-45)
| ||||||
| 19 | Sec. 830-45. Young Farmer Loan Guarantee Program.
| ||||||
| 20 | (a) The Authority is authorized to issue State Guarantees | ||||||
| 21 | to lenders for
loans
to finance or refinance debts of young | ||||||
| 22 | farmers. For the purposes of this
Section, a young farmer is a | ||||||
| 23 | resident of Illinois who is at least 18 years of
age and who is | ||||||
| 24 | a principal operator of a farm or land, who derives at least | ||||||
| 25 | 50%
of annual gross income from farming, whose net worth is not | ||||||
| |||||||
| |||||||
| 1 | less than $10,000
and whose debt to asset ratio is not less | ||||||
| 2 | than 40%. For the purposes of this
Section, debt to asset ratio | ||||||
| 3 | means current outstanding liabilities, including
any debt to be | ||||||
| 4 | financed or refinanced under this
Section 830-45, divided by
| ||||||
| 5 | current outstanding assets. The Authority shall establish the | ||||||
| 6 | maximum
permissible debt to asset ratio based on criteria | ||||||
| 7 | established by the Authority.
Lenders shall apply for the State | ||||||
| 8 | Guarantees on forms provided by the Authority
and certify that | ||||||
| 9 | the application and any other documents submitted are true and
| ||||||
| 10 | correct. The lender or borrower, or both in combination, shall | ||||||
| 11 | pay an
administrative fee as determined by the Authority. The | ||||||
| 12 | applicant shall be
responsible for paying any fee or charge | ||||||
| 13 | involved in recording mortgages,
releases, financing | ||||||
| 14 | statements, insurance for secondary market issues, and any
| ||||||
| 15 | other similar fee or charge that the Authority may require. The | ||||||
| 16 | application
shall at a minimum contain the young farmer's name, | ||||||
| 17 | address, present credit and
financial information, including | ||||||
| 18 | cash flow statements, financial statements,
balance sheets, | ||||||
| 19 | and any other information pertinent to the application, and the
| ||||||
| 20 | collateral to be used to secure the State Guarantee. In | ||||||
| 21 | addition, the borrower
must certify to the Authority that, at | ||||||
| 22 | the time the State Guarantee is
provided,
the borrower will not | ||||||
| 23 | be delinquent in the repayment of any debt. The lender
must | ||||||
| 24 | agree to charge a fixed or adjustable interest rate that the | ||||||
| 25 | Authority
determines to be below the market rate of interest | ||||||
| 26 | generally available to the
borrower. If both the lender and | ||||||
| |||||||
| |||||||
| 1 | applicant agree, the interest rate on the
State guaranteed loan | ||||||
| 2 | can be converted to a fixed interest rate at any time
during | ||||||
| 3 | the term of the loan.
State Guarantees provided under this
| ||||||
| 4 | Section (i) shall not exceed $500,000 per
young farmer, (ii) | ||||||
| 5 | shall be set up on a payment schedule not to exceed 30
years,
| ||||||
| 6 | but shall be no longer than 15 years in duration, and (iii) | ||||||
| 7 | shall be subject to
an annual review and renewal by the lender | ||||||
| 8 | and the Authority. A young farmer
may
use this program more | ||||||
| 9 | than once provided the aggregate principal amount of
State
| ||||||
| 10 | Guarantees under this
Section to that young farmer does not | ||||||
| 11 | exceed $500,000. No
State Guarantee shall be revoked by the | ||||||
| 12 | Authority without a 90-day notice, in
writing, to all parties.
| ||||||
| 13 | (b) The Authority shall provide or renew a State Guarantee | ||||||
| 14 | to a lender if:
| ||||||
| 15 | (i) The lender pays a fee equal to 25 basis points on | ||||||
| 16 | the loan to the
Authority on
an annual basis.
| ||||||
| 17 | (ii) The application provides collateral acceptable to | ||||||
| 18 | the
Authority that is at least equal to the State | ||||||
| 19 | Guarantee.
| ||||||
| 20 | (iii) The lender
assumes all responsibility and costs | ||||||
| 21 | for pursuing legal action on collecting
any
loan that is | ||||||
| 22 | delinquent or in default.
| ||||||
| 23 | (iv) The lender is at risk for the
first 15% of the | ||||||
| 24 | outstanding principal of the note for which the State
| ||||||
| 25 | Guarantee
is provided.
| ||||||
| 26 | (c) The Illinois Agricultural Loan Guarantee Fund and the | ||||||
| |||||||
| |||||||
| 1 | Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||||||
| 2 | used to
secure State Guarantees issued under this
Section as | ||||||
| 3 | provided in
Section 830-30 and Section 830-35, respectively.
| ||||||
| 4 | (d) Notwithstanding the provisions of this
Section 830-45 | ||||||
| 5 | with respect to the
young farmers and lenders who may obtain | ||||||
| 6 | State Guarantees, the Authority may
promulgate rules | ||||||
| 7 | establishing the eligibility of young farmers and lenders to
| ||||||
| 8 | participate in the State Guarantee program and the terms, | ||||||
| 9 | standards, and
procedures that will apply, when the Authority | ||||||
| 10 | finds that emergency conditions
in Illinois agriculture have | ||||||
| 11 | created the need for State Guarantees pursuant to
terms, | ||||||
| 12 | standards, and procedures other than those specified in this
| ||||||
| 13 | Section.
| ||||||
| 14 | (Source: P.A. 93-205, eff. 1-1-04.)
| ||||||
| 15 | (20 ILCS 3501/830-50)
| ||||||
| 16 | Sec. 830-50. Specialized Livestock Guarantee Program.
| ||||||
| 17 | (a) The Authority is authorized to issue State Guarantees | ||||||
| 18 | to lenders for
loans
to finance or refinance debts for | ||||||
| 19 | specialized livestock operations that are or
will be located in | ||||||
| 20 | Illinois. For purposes of this
Section, a "specialized
| ||||||
| 21 | livestock operation" includes, but is not limited to, dairy, | ||||||
| 22 | beef, and swine
enterprises. For purposes of this Section, a | ||||||
| 23 | specialized livestock operation also includes livestock | ||||||
| 24 | operations using anaerobic digestors to generate electricity.
| ||||||
| 25 | (b) Lenders shall apply for the State Guarantees on forms | ||||||
| |||||||
| |||||||
| 1 | provided by the
Authority and certify that the application and | ||||||
| 2 | any other documents submitted
are true and correct. The lender | ||||||
| 3 | or borrower, or both in combination, shall pay
an | ||||||
| 4 | administrative fee as determined by the Authority. The | ||||||
| 5 | applicant shall be
responsible for paying any fee or charge | ||||||
| 6 | involved in recording mortgages,
releases, financing | ||||||
| 7 | statements, insurance for secondary market issues, and any
| ||||||
| 8 | other similar fee or charge that the Authority may require. The | ||||||
| 9 | application
shall, at a minimum, contain the farmer's name, | ||||||
| 10 | address, present credit and
financial information, including | ||||||
| 11 | cash flow statements, financial statements,
balance sheets, | ||||||
| 12 | and any other information pertinent to the application, and the
| ||||||
| 13 | collateral to be used to secure the State Guarantee. In | ||||||
| 14 | addition, the borrower
must certify to the Authority that, at | ||||||
| 15 | the time the State Guarantee is
provided,
the borrower will not | ||||||
| 16 | be delinquent in the repayment of any debt. The lender
must | ||||||
| 17 | agree to charge a fixed or adjustable interest rate that the | ||||||
| 18 | Authority
determines to be below the market rate of interest | ||||||
| 19 | generally available to the
borrower. If both the lender and | ||||||
| 20 | applicant agree, the interest rate on the
State guaranteed loan | ||||||
| 21 | can be converted to a fixed interest rate at any time
during | ||||||
| 22 | the term of the loan.
| ||||||
| 23 | (c) State Guarantees provided under this
Section (i) shall | ||||||
| 24 | not exceed
$1,000,000 per applicant, (ii) shall be no longer | ||||||
| 25 | than 15 years in duration,
and
(iii) shall be subject to an | ||||||
| 26 | annual review and renewal by the lender and the
Authority. An | ||||||
| |||||||
| |||||||
| 1 | applicant may use this program more than once, provided that | ||||||
| 2 | the
aggregate principal amount of State Guarantees under this
| ||||||
| 3 | Section to that
applicant does not exceed $1,000,000. A State | ||||||
| 4 | Guarantee shall not be revoked by
the Authority without a | ||||||
| 5 | 90-day notice, in writing, to all parties.
| ||||||
| 6 | (d) The Authority shall provide or renew a State Guarantee | ||||||
| 7 | to a lender if:
(i) The lender pays a fee equal to 25 basis | ||||||
| 8 | points on the loan to the Authority
on
an annual basis. (ii) | ||||||
| 9 | The application provides collateral acceptable to the
| ||||||
| 10 | Authority that is at least equal to the State Guarantee. (iii) | ||||||
| 11 | The lender
assumes all responsibility and costs for pursuing | ||||||
| 12 | legal action on collecting
any
loan that is delinquent or in | ||||||
| 13 | default. (iv) The lender is at risk for the first
15% of the | ||||||
| 14 | outstanding principal of the note for which the State Guarantee | ||||||
| 15 | is
provided.
| ||||||
| 16 | (e) The Illinois Agricultural Loan Guarantee Fund and the | ||||||
| 17 | Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||||||
| 18 | used to
secure State Guarantees issued under this
Section as | ||||||
| 19 | provided in
Section 830-30 and Section 830-35, respectively.
| ||||||
| 20 | (f) Notwithstanding the provisions of this
Section 830-50 | ||||||
| 21 | with respect to the
specialized livestock operations and | ||||||
| 22 | lenders who may obtain State Guarantees,
the Authority may | ||||||
| 23 | promulgate rules establishing the eligibility of specialized
| ||||||
| 24 | livestock operations and lenders to participate in the State | ||||||
| 25 | Guarantee program
and the terms, standards, and procedures that | ||||||
| 26 | will apply, when the Authority
finds that emergency conditions | ||||||
| |||||||
| |||||||
| 1 | in Illinois agriculture have created the need
for State | ||||||
| 2 | Guarantees pursuant to terms, standards, and procedures other | ||||||
| 3 | than
those specified in this Section.
| ||||||
| 4 | (Source: P.A. 95-697, eff. 11-6-07.)
| ||||||
| 5 | (20 ILCS 3501/830-55 new) | ||||||
| 6 | Sec. 830-55. Working Capital Loan Guarantee Program. | ||||||
| 7 | (a) The Authority is authorized to issue State Guarantees | ||||||
| 8 | to lenders for loans to finance needed input costs related to | ||||||
| 9 | and in connection with planting and raising agricultural crops | ||||||
| 10 | and commodities in Illinois. Eligible input costs include, but | ||||||
| 11 | are not limited to, fertilizer, chemicals, feed, seed, fuel, | ||||||
| 12 | parts, and repairs. At the discretion of the Authority, the | ||||||
| 13 | farmer, producer, or agribusiness must be able to provide the | ||||||
| 14 | originating lender with a first lien on the proposed crop or | ||||||
| 15 | commodity to be raised and an assignment of Federal Crop | ||||||
| 16 | Insurance sufficient to secure the Working Capital Loan. | ||||||
| 17 | Additional collateral may be required as deemed necessary by | ||||||
| 18 | the lender and the Authority. | ||||||
| 19 | For the purposes of this Section, an eligible farmer, | ||||||
| 20 | producer, or agribusiness is a resident of Illinois who is at | ||||||
| 21 | least 18 years of age and who is a principal operator of a farm | ||||||
| 22 | or land, who derives at least 50% of annual gross income from | ||||||
| 23 | farming, and whose debt to asset ratio is not less than 40%. | ||||||
| 24 | For the purposes of this Section, debt to asset ratio means | ||||||
| 25 | current outstanding liabilities, including any debt to be | ||||||
| |||||||
| |||||||
| 1 | financed or refinanced under this Section 830-55, divided by | ||||||
| 2 | current outstanding assets. The Authority shall establish the | ||||||
| 3 | maximum permissible debt to asset ratio based on criteria | ||||||
| 4 | established by the Authority. Lenders shall apply for the State | ||||||
| 5 | Guarantees on forms provided by the Authority and certify that | ||||||
| 6 | the application and any other documents submitted are true and | ||||||
| 7 | correct. The lender or borrower, or both in combination, shall | ||||||
| 8 | pay an administrative fee as determined by the Authority. The | ||||||
| 9 | applicant shall be responsible for paying any fee or charge | ||||||
| 10 | involved in recording mortgages, releases, financing | ||||||
| 11 | statements, insurance for secondary market issues, and any | ||||||
| 12 | other similar fee or charge that the Authority may require. The | ||||||
| 13 | application shall at a minimum contain the borrower's name, | ||||||
| 14 | address, present credit and financial information, including | ||||||
| 15 | cash flow statements, financial statements, balance sheets, | ||||||
| 16 | and any other information pertinent to the application, and the | ||||||
| 17 | collateral to be used to secure the State Guarantee. In | ||||||
| 18 | addition, the borrower must certify to the Authority that, at | ||||||
| 19 | the time the State Guarantee is provided, the borrower will not | ||||||
| 20 | be delinquent in the repayment of any debt. The lender must | ||||||
| 21 | agree to charge a fixed or adjustable interest rate that the | ||||||
| 22 | Authority determines to be below the market rate of interest | ||||||
| 23 | generally available to the borrower. If both the lender and | ||||||
| 24 | applicant agree, the interest rate on the State guaranteed loan | ||||||
| 25 | can be converted to a fixed interest rate at any time during | ||||||
| 26 | the term of the loan. State Guarantees provided under this | ||||||
| |||||||
| |||||||
| 1 | Section (i) shall not exceed $250,000 per borrower, (ii) shall | ||||||
| 2 | be repaid annually, and (iii) shall be subject to an annual | ||||||
| 3 | review and renewal by the lender and the Authority. The State | ||||||
| 4 | Guarantee may be renewed annually, for a period not to exceed 3 | ||||||
| 5 | total years per State Guarantee, if the borrower meets | ||||||
| 6 | financial criteria and other conditions, as established by the | ||||||
| 7 | Authority. A farmer or agribusiness may use this program more | ||||||
| 8 | than once provided the aggregate principal amount of State | ||||||
| 9 | Guarantees under this Section to that farmer or agribusiness | ||||||
| 10 | does not exceed $250,000 annually. No State Guarantee shall be | ||||||
| 11 | revoked by the Authority without a 90-day notice, in writing, | ||||||
| 12 | to all parties. | ||||||
| 13 | (b) The Authority shall provide a State Guarantee to a | ||||||
| 14 | lender if: | ||||||
| 15 | (i) The borrower pays to the Authority a fee equal to | ||||||
| 16 | 100 basis points on the loan. | ||||||
| 17 | (ii) The application provides collateral acceptable to | ||||||
| 18 | the Authority that is at least equal to the State | ||||||
| 19 | Guarantee. | ||||||
| 20 | (iii) The lender assumes all responsibility and costs | ||||||
| 21 | for pursuing legal action on collecting any loan that is | ||||||
| 22 | delinquent or in default. | ||||||
| 23 | (iv) The lender is at risk for the first 15% of the | ||||||
| 24 | outstanding principal of the note for which the State | ||||||
| 25 | Guarantee is provided. | ||||||
| 26 | (c) The Illinois Agricultural Loan Guarantee Fund and the | ||||||
| |||||||
| |||||||
| 1 | Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||||||
| 2 | used to secure State Guarantees issued under this Section as | ||||||
| 3 | provided in Section 830-30 and Section 830-35, respectively. | ||||||
| 4 | (d) Notwithstanding the provisions of this Section 830-55 | ||||||
| 5 | with respect to the borrowers and lenders who may obtain State | ||||||
| 6 | Guarantees, the Authority may promulgate rules establishing | ||||||
| 7 | the eligibility of borrowers and lenders to participate in the | ||||||
| 8 | State Guarantee program and the terms, standards, and | ||||||
| 9 | procedures that will apply, when the Authority finds that | ||||||
| 10 | emergency conditions in Illinois agriculture have created the | ||||||
| 11 | need for State Guarantees pursuant to terms, standards, and | ||||||
| 12 | procedures other than those specified in this Section.
| ||||||
| 13 | Section 99. Effective date. This Act takes effect upon | ||||||
| 14 | becoming law.
| ||||||
