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Public Act 91-0386
HB2034 Enrolled LRB9105498PTpk
AN ACT to amend the Illinois Farm Development Act by
changing Sections 8, 12.1, 12.2, 12.4, and 12.5.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Farm Development Act is amended
by changing Sections 8, 12.1, 12.2, 12.4, and 12.5 as
follows:
(20 ILCS 3605/8) (from Ch. 5, par. 1208)
Sec. 8. Bonds of the Authority.
(1) Source of Payment. All Bonds issued by the Authority
shall be payable solely out of the revenues and other
receipts of the Authority as may be designated in the
proceedings of the Board under which the Bonds shall be
authorized to be issued.
(2) Pledge of Revenues and Other Security. The
principal of and interest on any Bonds issued by the
Authority shall be secured by a pledge of the revenues and
other receipts out of which the same may be payable and may
be secured by a trust indenture evidencing such pledge or by
a foreclosable mortgage and deed of trust conveying as
security for such Bonds all or any part of the property of
the Authority from which the revenues so pledged may be
derived. The resolution under which the Bonds are authorized
to be issued or any such trust indenture or mortgage may
contain any agreements and provisions respecting the
maintenance and insurance of the property covered by such
trust indenture or mortgage, the use of the revenues subject
to such trust indenture or mortgage, the creation and
maintenance of special funds from such revenues, the rights,
duties and remedies of the parties to any such instrument and
the parties for the benefit of whom such instrument is made
and the rights and remedies available in the event of default
as the Board shall deem advisable and which are not in
conflict with the provisions of this Act.
(3) Execution. All Bonds issued by the Authority shall
be signed by its chairman or vice chairman and attested by
its secretary, and the seal of the Authority shall be affixed
thereto, and any interest coupons applicable to the Bonds of
the Authority shall be signed by its chairman or vice
chairman; provided, that a facsimile of the signature of said
officers may be printed or otherwise reproduced on any such
Bonds in lieu of his manually signing the same as long as
such Bond is manually authenticated by a trustee or agent of
the Authority, a facsimile of the seal of the Authority may
be printed or otherwise reproduced on any such Bonds in lieu
of being manually affixed thereto, and a facsimile of the
signature of its chairman or vice chairman may be printed or
otherwise reproduced on any such interest coupons in lieu of
his manually signing the same.
(4) General Provisions Respecting Form, Interest Rate,
Maturities, Sale and Negotiability of Bonds. Any such Bonds
may be executed and delivered by the Authority at any time
and from time to time, shall be in such form and
denominations and of such tenor and maturities, shall contain
such provisions permitting or restricting redemption of such
Bonds prior to their maturities, shall contain such
provisions not inconsistent with the provisions of this Act,
and shall bear such rate or rates of interest, payable and
evidenced in such manner, as may be provided by resolution of
its Board. Bonds of the Authority may be sold at public or
private sale, at such price or prices and at such time as
determined by the Board of Directors to be advantageous.
The Authority may pay all expenses, premiums and
commissions in connection with any financing done by it.
(5) Nature of Obligation and Source of Payment. Except
as specified in Sections 12.1, and 12.2, 12.4, and 12.5 of
this Act with respect to State Guarantees, all obligations
created and all Bonds issued by the Authority shall be solely
and exclusively an obligation of the Authority and shall not
create an obligation or debt of the State or a charge on its
credit or taxing powers. Any Bonds issued by the Authority
shall be limited or special obligations of the Authority
payable solely out of the revenues and other receipts of the
Authority specified in the proceedings authorizing those
Bonds. Nothing in this paragraph shall be deemed to prohibit
the granting of "State Guarantees" as defined in subsection
(k) of Section 2 and authorized by Sections Section 12.1, and
Section 12.2, 12.4, and 12.5 of this Act.
(6) Resolution Authorizing Bonds. The Authority may not
pass a resolution authorizing the issuance of any notes or
bonds in excess of $250,000 for any one real estate borrower.
No proceeds from any bonds issued by the Authority shall be
loaned to any natural person who has a net worth in excess of
$500,000 for the purchase of new depreciable agricultural
property or to any agribusiness that, including all
affiliates and subsidiaries, has more than 100 employees and
a gross income exceeding $2,000,000 for the preceding
calendar year; provided, however, that the employee size and
gross income limitations shall not apply to any loans to
agribusinesses for research and development purposes, and
provided further that the Authority shall retain the power to
waive such limitations for any agribusiness that, at the time
of application, does not operate a facility within this
State. Resolutions of the Authority authorizing the issuance
of any notes or bonds or any issue thereof under this Act may
provide for:
(a) Pledging all or any part of the fees and charges
made or received by the Authority, and all or any part of the
moneys received in payment of any loans, notes, bonds, or
other evidences of indebtedness and other moneys received or
to be received by the Authority, to secure the payment of the
notes or bonds or of any issue thereof, and subject to such
agreements with bondholders or noteholders as may then exist;
(b) Pledging all or any part of the revenue of the
Authority, including payments or income from any loans,
notes, bonds, or other evidences of indebtedness owned or
held by the Authority, to secure the payment of the notes or
bonds issued under this Act or of any issue of such notes or
bonds, subject to such agreements with noteholders or
bondholders as may then exist;
(c) Pledging of any loan, grant, or contribution from
the federal, State, or local government, if authorized by the
terms of such loan, grant, or contribution;
(d) The use and disposition of the gross income from
mortgage loans owned by the Authority and payment of the
principal of mortgage loans owned by the Authority;
(e) The setting aside of reserves or sinking funds and
the regulation and disposition thereof;
(f) Limitations on the purpose to which the proceeds of
sale of notes or bonds may be applied and pledging such
proceeds to secure the payment of the notes or bonds or of
any issue thereof;
(g) Limitations on the issuance of additional notes or
bonds; the terms upon which additional notes or bonds may be
issued and secured; and the refunding of outstanding or other
notes or bonds;
(h) The procedure, if any, by which the terms of any
contract with noteholders or bondholders may be amended or
abrogated, the amount of notes or bonds the holders of which
must consent thereto, and the manner in which such consent
may be given;
(i) Vesting in a trustee or trustees such property,
rights, power and duties in trust as the Authority may
determine, which may include any or all of the rights, powers
and duties of the trustee appointed by the bondholders
pursuant to this Act and limiting or abrogating the right of
the bondholders to appoint a trustee or limiting the rights,
powers and duties of such trustee;
(j) Any other matter, of like or different character,
which in any way affect the security or protection of the
notes or bonds issued by the Authority.
(7) Refunding Bonds. Any bonds issued by the Authority
may from time to time be refunded by the issuance, by sale or
exchange, of refunding Bonds payable from the same or
different sources for the purpose of paying all or any part
of the principal of the Bonds to be refunded, any redemption
premium required to be paid as a condition to the redemption
prior to maturity of any such Bonds that are to be so
redeemed in connection with such refunding, any accrued and
unpaid interest on the Bonds to be refunded, any interest to
accrue on each Bond to be refunded to the date on which it is
to be paid, whether at maturity or by redemption prior to
maturity, and the expense incurred in connection with such
refunding; provided, that unless duly called for redemption
pursuant to provisions contained therein, the holders of any
such bonds then outstanding and proposed to be refunded shall
not be compelled without their consent to surrender their
outstanding Bonds for such refunding. Any refunding Bonds
may be sold by the Authority at public or private sale at
such price or prices as may be exchanged for the Bonds or
other obligations to be refunded. Any refunding Bonds issued
by an Authority shall be issued and may be secured in
accordance with the provisions of Section 6 of this Act.
(Source: P.A. 85-916; 85-952.)
(20 ILCS 3605/12.1) (from Ch. 5, par. 1212.1)
Sec. 12.1. State Guarantees for existing debt.
(a) The Authority is authorized to issue State
Guarantees for farmers' existing debts held by a lender. For
the purposes of this Section, a farmer shall be a resident of
Illinois, who is a principal operator of a farm or land, at
least 50% of whose annual gross income is derived from
farming and whose debt to asset ratio shall not be less than
40%, except in those cases where the applicant has previously
used the guarantee program there shall be no debt to asset
ratio or income restriction. For the purposes of this
Section, debt to asset ratio shall mean the current
outstanding liabilities of the farmer divided by the current
outstanding assets of the farmer. The Authority shall
establish the maximum permissible debt to asset ratio based
on criteria established by the Authority.
Lenders shall apply for the State Guarantees on forms
provided by the Authority and certify that the application
and any other documents submitted are true and correct. The
lender or borrower, or both in combination, shall pay an
administrative fee as determined by the Authority. The
applicant shall be responsible for paying any fees or charges
involved in recording mortgages, releases, financing
statements, insurance for secondary market issues and any
other similar fees or charges as the Authority may require.
The application shall at a minimum contain the farmer's name,
address, present credit and financial information, including
cash flow statements, financial statements, balance sheets,
and any other information pertinent to the application, and
the collateral to be used to secure the State Guarantee. In
addition, the lender must agree to bring the farmer's debt to
a current status at the time the State Guarantee is provided
and must also agree to charge a fixed or adjustable interest
rate which the Authority determines to be below the market
rate of interest generally available to the borrower. If
both the lender and applicant agree, the interest rate on the
State Guarantee Loan can be converted to a fixed interest
rate at any time during the term of the loan.
Any State Guarantees provided under this Section (i)
shall not exceed $500,000 per farmer, (ii) shall be set up on
a payment schedule not to exceed 30 years, and shall be no
longer than 30 years in duration, and (iii) shall be subject
to an annual review and renewal by the lender and the
Authority; provided that only one such State Guarantee shall
be outstanding per farmer at any one time. No State
Guarantee shall be revoked by the Authority without a 90 day
notice, in writing, to all parties. In those cases were the
borrower has not previously used the guarantee program, the
lender shall not call due any loan during the first 3 years
for any reason except for lack of performance or insufficient
collateral. The lender can review and withdraw or continue
with the State Guarantee on an annual basis after the first 3
years of the loan, provided a 90 day notice, in writing, to
all parties has been given.
(b) The Authority shall provide or renew a State
Guarantee to a lender if:
(i) A fee equal to 25 basis points on the loan is
paid to the Authority on an annual basis by the lender.
(ii) The application provides collateral acceptable
to the Authority that is at least equal to the State's
portion of the Guarantee to be provided.
(iii) The lender assumes all responsibility and
costs for pursuing legal action on collecting any loan
that is delinquent or in default.
(iv) The lender is responsible for the first 15% of
the outstanding principal of the note for which the State
Guarantee has been applied.
(c) There is hereby created outside of the State
Treasury a special fund to be known as the Illinois
Agricultural Loan Guarantee Fund. The State Treasurer shall
be custodian of this Fund. Any amounts in the Illinois
Agricultural Loan Guarantee Fund not currently needed to meet
the obligations of the Fund shall be invested as provided by
law, and all interest earned from these investments shall be
deposited into the Fund until the Fund reaches the maximum
amount authorized established in this Act Section;
thereafter, interest earned shall be deposited into the
General Revenue Fund. After September 1, 1989, annual
investment earnings equal to 1.5% of the Fund shall remain in
the Fund to be used for the purposes established in Section
12.3 of this Act.
The Authority is authorized to transfer no more than
$45,000,000 to the Fund such amounts as are necessary to
satisfy claims during the duration of the State Guarantee
program to secure State Guarantees issued under this Section
and the State shall not be liable for more than $45,000,000
to secure State Guarantees issued under this Section. If for
any reason the General Assembly fails to make an
appropriation sufficient to meet these obligations, this Act
shall constitute an irrevocable and continuing appropriation
of an amount necessary to secure guarantees as defaults occur
up to an amount equal to the difference between the
$45,000,000 obligation and all amounts previously transferred
to the Illinois Agricultural Loan Guarantee Fund and the
irrevocable and continuing authority for, and direction to,
the State Treasurer and the Comptroller to make the necessary
transfers to the Illinois Agricultural Loan Guarantee Fund,
as directed by the Governor, out of the General Revenue Fund.
Any amounts transferred from the Illinois Agricultural Loan
Guarantee Fund to the General Revenue Fund, under powers
granted to the Governor by Public Act 87-14, shall not be
considered in determining if the maximum of $45,000,000 has
been transferred into the Illinois Agricultural Loan
Guarantee Fund.
Within 30 days after November 15, 1985, the Authority may
transfer up to $7,000,000 from available appropriations into
the Illinois Agricultural Loan Guarantee Fund for the
purposes of this Act. Thereafter, the Authority may transfer
additional amounts into the Illinois Agricultural Loan
Guarantee Fund to secure guarantees for defaults as defaults
occur.
In the event of default by the farmer, the lender shall
be entitled to, and the Authority shall direct payment on,
the State Guarantee after 90 days of delinquency. All
payments by the Authority shall be made from the Illinois
Agricultural Loan Guarantee Fund to satisfy claims against
the State Guarantee. The Illinois Agricultural Loan
Guarantee Fund shall guarantee receipt of payment of the 85%
of the principal and interest owed on the State Guarantee
Loan by the farmer to the guarantee holder.
It shall be the responsibility of the lender to proceed
with the collecting and disposing of collateral on the State
Guarantee within 14 months of the time the State Guarantee is
declared delinquent; provided, however, that the lender shall
not collect or dispose of collateral on the State Guarantee
without the express written prior approval of the Authority.
If the lender does not dispose of the collateral within 14
months, the lender shall be liable to repay to the State
interest on the State Guarantee equal to the same rate which
the lender charges on the State Guarantee; provided, however,
that the Authority may extend the 14 month period for a
lender in the case of bankruptcy or extenuating
circumstances. The Fund shall be reimbursed for any amounts
paid under this Section upon liquidation of the collateral.
The Authority, by resolution of the Board, may borrow sums
from the Fund and provide for repayment as soon as may be
practical upon receipt of payments of principal and interest
by a farmer. Money may be borrowed from the Fund by the
Authority for the sole purpose of paying certain interest
costs for farmers associated with selling a loan subject to a
State Guarantee in a secondary market as may be deemed
reasonable and necessary by the Authority.
(d) Notwithstanding the provisions of this Section 12.1
with respect to the farmers and lenders who may obtain State
Guarantees, the Authority may promulgate rules establishing
the eligibility of farmers and lenders to participate in the
State guarantee program and the terms, standards, and
procedures that will apply, when the Authority finds that
emergency conditions in Illinois agriculture have created the
need for State Guarantees pursuant to terms, standards, and
procedures other than those specified in this Section.
(Source: P.A. 89-154, eff. 7-19-95; 90-325, eff. 8-8-97.)
(20 ILCS 3605/12.2) (from Ch. 5, par. 1212.2)
Sec. 12.2. State Guarantees for loans to farmers and
agribusiness; eligibility.
(a) The Authority is authorized to issue State
Guarantees to lenders for loans to eligible farmers and
agribusinesses for purposes set forth in this Section. For
purposes of this Section, an eligible farmer shall be a
resident of Illinois (i) who is principal operator of a farm
or land, at least 50% of whose annual gross income is derived
from farming, (ii) whose annual total sales of agricultural
products, commodities, or livestock exceeds $20,000, and
(iii) whose net worth does not exceed $500,000. An eligible
agribusiness shall be that as defined in Section 2 of this
Act.
The Authority may approve applications by farmers and
agribusinesses that promote diversification of the farm
economy of this State through the growth and development of
new crops or livestock not customarily grown or produced in
this State or that emphasize a vertical integration of grain
or livestock produced or raised in this State into a finished
agricultural product for consumption or use. "New crops or
livestock not customarily grown or produced in this State"
shall not include corn, soybeans, wheat, swine, or beef or
dairy cattle. "Vertical integration of grain or livestock
produced or raised in this State" shall include any new or
existing grain or livestock grown or produced in this State.
Lenders shall apply for the State Guarantees on forms
provided by the Authority, certify that the application and
any other documents submitted are true and correct, and pay
an administrative fee as determined by the Authority. The
applicant shall be responsible for paying any fees or charges
involved in recording mortgages, releases, financing
statements, insurance for secondary market issues and any
other similar fees or charges as the Authority may require.
The application shall at a minimum contain the farmer's or
agribusiness' name, address, present credit and financial
information, including cash flow statements, financial
statements, balance sheets, and any other information
pertinent to the application, and the collateral to be used
to secure the State Guarantee. In addition, the lender must
agree to charge an interest rate, which may vary, on the loan
that the Authority determines to be below the market rate of
interest generally available to the borrower. If both the
lender and applicant agree, the interest rate on the State
Guarantee Loan can be converted to a fixed interest rate at
any time during the term of the loan.
Any State Guarantees provided under this Section (i)
shall not exceed $500,000 per farmer or an amount as
determined by the Authority on a case-by-case basis for an
agribusiness, (ii) shall not exceed a term of 15 years, and
(iii) shall be subject to an annual review and renewal by the
lender and the Authority; provided that only one such State
Guarantee shall be made per farmer or agribusiness, except
that additional State Guarantees may be made for purposes of
expansion of projects financed in part by a previously issued
State Guarantee. No State Guarantee shall be revoked by the
Authority without a 90 day notice, in writing, to all
parties. The lender shall not call due any loan for any
reason except for lack of performance, insufficient
collateral, or maturity. A lender may review and withdraw or
continue with a State Guarantee on an annual basis after the
first 5 years following closing of the loan application if
the loan contract provides for an interest rate that shall
not vary. A lender shall not withdraw a State Guarantee if
the loan contract provides for an interest rate that may
vary, except for reasons set forth herein.
(b) The Authority shall provide or renew a State
Guarantee to a lender if:
i. A fee equal to 25 basis points on the loan is
paid to the Authority on an annual basis by the lender.
ii. The application provides collateral acceptable
to the Authority that is at least equal to the State's
portion of the Guarantee to be provided.
iii. The lender assumes all responsibility and
costs for pursuing legal action on collecting any loan
that is delinquent or in default.
iv. The lender is responsible for the first 15% of
the outstanding principal of the note for which the State
Guarantee has been applied.
(c) There is hereby created outside of the State
Treasury a special fund to be known as the Illinois Farmer
and Agribusiness Loan Guarantee Fund. The State Treasurer
shall be custodian of this Fund. Any amounts in the Fund not
currently needed to meet the obligations of the Fund shall be
invested as provided by law, and all interest earned from
these investments shall be deposited into the Fund until the
Fund reaches the maximum amounts authorized established in
this Act Section; thereafter, interest earned shall be
deposited into the General Revenue Fund. After September 1,
1989, annual investment earnings equal to 1.5% of the Fund
shall remain in the Fund to be used for the purposes
established in Section 12.3 of this Act.
The Authority is authorized to transfer such amounts as
are necessary to satisfy claims an amount not to exceed
$15,000,000 from available appropriations and from fund
balances of the Farm Emergency Assistance Fund as of June 30
of each year to the Illinois Farmer and Agribusiness Loan
Guarantee Fund to secure State Guarantees issued under this
Section and Sections Section 12.4 and 12.5 and the State
shall not be liable for more than $15,000,000 to secure State
Guarantees issued under this Section and Section 12.4. If for
any reason the General Assembly fails to make an
appropriation sufficient to meet these obligations, this Act
shall constitute an irrevocable and continuing appropriation
of an amount necessary to secure guarantees as defaults occur
up to an amount equal to the difference between the
$15,000,000 obligation and all amounts previously transferred
to the Illinois Farmer and Agribusiness Loan Guarantee Fund
and the irrevocable and continuing authority for, and
direction to, the State Treasurer and the Comptroller to make
the necessary transfers to the Illinois Farmer and
Agribusiness Loan Guarantee Fund, as directed by the
Governor, out of the General Revenue Fund.
In the event of default by the borrower farmer or
agribusiness on State Guarantee Loans under this Section, or
Section 12.4, or Section 12.5, the lender shall be entitled
to, and the Authority shall direct payment on, the State
Guarantee after 90 days of delinquency. All payments by the
Authority shall be made from the Illinois Farmer and
Agribusiness Loan Guarantee Fund to satisfy claims against
the State Guarantee.
It shall be the responsibility of the lender to proceed
with the collecting and disposing of collateral on the State
Guarantee under this Section, or Section 12.4, or Section
12.5 within 14 months of the time the State Guarantee is
declared delinquent. If the lender does not dispose of the
collateral within 14 months, the lender shall be liable to
repay to the State interest on the State Guarantee equal to
the same rate that the lender charges on the State Guarantee,
provided that the Authority shall have the authority to
extend the 14 month period for a lender in the case of
bankruptcy or extenuating circumstances. The Fund shall be
reimbursed for any amounts paid under this Section, Section
12.4, or Section 12.5 upon liquidation of the collateral.
The Authority, by resolution of the Board, may borrow
sums from the Fund and provide for repayment as soon as may
be practical upon receipt of payments of principal and
interest by a borrower farmer or agribusiness on State
Guarantee Loans under this Section, or Section 12.4, or
Section 12.5. Money may be borrowed from the Fund by the
Authority for the sole purpose of paying certain interest
costs for borrowers farmers or agribusinesses associated with
selling a loan subject to a State Guarantee under this
Section, or Section 12.4, or Section 12.5 in a secondary
market as may be deemed reasonable and necessary by the
Authority.
(d) Notwithstanding the provisions of this Section 12.2
with respect to the farmers, agribusinesses, and lenders who
may obtain State Guarantees, the Authority may promulgate
rules establishing the eligibility of farmers,
agribusinesses, and lenders to participate in the State
Guarantee program and the terms, standards, and procedures
that will apply, when the Authority finds that emergency
conditions in Illinois agriculture have created the need for
State Guarantees pursuant to terms, standards, and procedures
other than those specified in this Section.
(Source: P.A. 90-325, eff. 8-8-97.)
(20 ILCS 3605/12.4) (from Ch. 5, par. 1212.4)
Sec. 12.4. Young Farmer Loan Guarantee Program.
(a) The Authority is authorized to issue State
Guarantees to lenders for loans to finance or refinance debts
of young farmers. For the purposes of this Section, a young
farmer is a resident of Illinois who is at least 18 years of
age and who is a principal operator of a farm or land, who
derives at least 50% of annual gross income from farming,
whose net worth is not less than $10,000 and whose debt to
asset ratio is not less than 40%. For the purposes of this
Section, debt to asset ratio means current outstanding
liabilities, including any debt to be financed or refinanced
under this Section, divided by current outstanding assets.
The Authority shall establish the maximum permissible debt to
asset ratio based on criteria established by the Authority.
Lenders shall apply for the State Guarantees on forms
provided by the Authority and certify that the application
and any other documents submitted are true and correct. The
lender or borrower, or both in combination, shall pay an
administrative fee as determined by the Authority. The
applicant shall be responsible for paying any fee or charge
involved in recording mortgages, releases, financing
statements, insurance for secondary market issues, and any
other similar fee or charge that the Authority may require.
The application shall at a minimum contain the young farmer's
name, address, present credit and financial information,
including cash flow statements, financial statements, balance
sheets, and any other information pertinent to the
application, and the collateral to be used to secure the
State Guarantee. In addition, the borrower must certify to
the Authority that, at the time the State Guarantee is
provided, the borrower will not be delinquent in the
repayment of any debt. The lender must agree to charge a
fixed or adjustable interest rate that the Authority
determines to be below the market rate of interest generally
available to the borrower. If both the lender and applicant
agree, the interest rate on the State guaranteed loan can be
converted to a fixed interest rate at any time during the
term of the loan.
State Guarantees provided under this Section (i) shall
not exceed $500,000 per young farmer, (ii) shall be set up on
a payment schedule not to exceed 30 years, but shall be no
longer than 15 years in duration, and (iii) shall be subject
to an annual review and renewal by the lender and the
Authority. A young farmer may use this program more than once
provided the aggregate principal amount of State Guarantees
under this Section to that young farmer does not exceed
$500,000. No State Guarantee shall be revoked by the
Authority without a 90 day notice, in writing, to all
parties.
(b) The Authority shall provide or renew a State
Guarantee to a lender if:
(i) The lender pays a fee equal to 25 basis points
on the loan to the Authority on an annual basis.
(ii) The application provides collateral acceptable
to the Authority that is at least equal to the State
Guarantee.
(iii) The lender assumes all responsibility and
costs for pursuing legal action on collecting any loan
that is delinquent or in default.
(iv) The lender is at risk for the first 15% of the
outstanding principal of the note for which the State
Guarantee is provided.
(c) The Illinois Farmer and Agribusiness Loan Guarantee
Fund may be used to secure State Guarantees issued under this
Section as provided in Section 12.2.
(d) Notwithstanding the provisions of this Section 12.4
with respect to the young farmers and lenders who may obtain
State Guarantees, the Authority may promulgate rules
establishing the eligibility of young farmers and lenders to
participate in the State Guarantee program and the terms,
standards, and procedures that will apply, when the Authority
finds that emergency conditions in Illinois agriculture have
created the need for State Guarantees pursuant to terms,
standards, and procedures other than those specified in this
Section.
(Source: P.A. 89-154, eff. 7-19-95; 90-325, eff. 8-8-97.)
(20 ILCS 3605/12.5)
Sec. 12.5. Specialized Livestock Guarantee Program.
(a) The Authority is authorized to issue State
Guarantees to lenders for loans to finance or refinance debts
for specialized livestock operations that are or will be
located in Illinois. For purposes of this Section, a
"specialized livestock operation" includes, but is not
limited to, dairy, beef, and swine enterprises.
(b) Lenders shall apply for the State Guarantees on
forms provided by the Authority and certify that the
application and any other documents submitted are true and
correct. The lender or borrower, or both in combination,
shall pay an administrative fee as determined by the
Authority. The applicant shall be responsible for paying any
fee or charge involved in recording mortgages, releases,
financing statements, insurance for secondary market issues,
and any other similar fee or charge that the Authority may
require. The application shall, at a minimum, contain the
farmer's name, address, present credit and financial
information, including cash flow statements, financial
statements, balance sheets, and any other information
pertinent to the application, and the collateral to be used
to secure the State Guarantee. In addition, the borrower
must certify to the Authority that, at the time the State
Guarantee is provided, the borrower will not be delinquent in
the repayment of any debt. The lender must agree to charge a
fixed or adjustable interest rate that the Authority
determines to be below the market rate of interest generally
available to the borrower. If both the lender and applicant
agree, the interest rate on the State guaranteed loan can be
converted to a fixed interest rate at any time during the
term of the loan.
(c) State Guarantees provided under this Section (i)
shall not exceed $1,000,000 per applicant, (ii) shall be no
longer than 15 years in duration, and (iii) shall be subject
to an annual review and renewal by the lender and the
Authority. An applicant may use this program more than once,
provided that the aggregate principal amount of State
Guarantees under this Section to that applicant does not
exceed $1,000,000. A State Guarantee shall not be revoked by
the Authority without a 90-day notice, in writing, to all
parties.
(d) The Authority shall provide or renew a State
Guarantee to a lender if:
(i) The lender pays a fee equal to 25 basis points
on the loan to the Authority on an annual basis.
(ii) The application provides collateral acceptable
to the Authority that is at least equal to the State
Guarantee.
(iii) The lender assumes all responsibility and
costs for pursuing legal action on collecting any loan
that is delinquent or in default.
(iv) The lender is at risk for the first 15% of the
outstanding principal of the note for which the State
Guarantee is provided.
(e) The Illinois Farmer and Agribusiness Loan Guarantee
Fund may be used to secure State Guarantees issued under this
Section as provided in Section 12.2.
(f) Notwithstanding the provisions of this Section 12.5
with respect to the specialized livestock operations and
lenders who may obtain State Guarantees, the Authority may
promulgate rules establishing the eligibility of specialized
livestock operations and lenders to participate in the State
Guarantee program and the terms, standards, and procedures
that will apply, when the Authority finds that emergency
conditions in Illinois agriculture have created the need for
State Guarantees pursuant to terms, standards, and procedures
other than those specified in this Section.
(Source: P.A. 89-527, eff. 7-19-96.)
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