98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5907

 

Introduced , by Rep. John D. Anthony

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3501/830-47 new

    Amends the Illinois Finance Authority Act. Provides that the Authority is authorized to issue State guarantees to lenders for loans to small family farm operations, operators of community-supported agriculture, and beginning farmers. Provides that those guarantees (i) shall not exceed $35,000 per qualified applicant, (ii) shall be set up on a payment schedule not to exceed 7 years, except that annual operating loans must be repaid within 12 months after the agricultural commodities are sold, and (iii) shall be subject to annual review and renewal by the lender and the Authority. Provides that the Illinois Agricultural Loan Guarantee Fund and the Illinois Farmer and Agribusiness Loan Guarantee Fund may be used to secure those guarantees.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5907LRB098 17666 HLH 52780 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Finance Authority Act is amended by
5adding Section 830-47 as follows:
 
6    (20 ILCS 3501/830-47 new)
7    Sec. 830-47. Microloans for small and beginning farmers.
8    (a) The Authority is authorized to issue State guarantees
9to lenders for loans to small family farm operations, operators
10of community-supported agriculture, and beginning farmers. A
11qualified applicant under this Section is a resident of
12Illinois who is at least 18 years of age and who is a principal
13operator of a farm or land, whose net worth is not less than
14$10,000, and whose debt to asset ratio is not less than 40%.
15For the purposes of this Section, debt to asset ratio means
16current outstanding liabilities, including any debt to be
17financed or refinanced under this Section, divided by current
18outstanding assets. The Authority shall establish the maximum
19permissible debt to asset ratio based on criteria established
20by the Authority.
21    (b) State guarantees provided under this Section (i) shall
22not exceed $35,000 per qualified applicant, (ii) shall be set
23up on a payment schedule not to exceed 7 years, except that

 

 

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1annual operating loans must be repaid within 12 months after
2the agricultural commodities are sold, and (iii) shall be
3subject to annual review and renewal by the lender and the
4Authority.
5    (c) Loans under this Section may be used for the following
6purposes, without limitation:
7        (1) initial start-up expenses;
8        (2) annual expenses such as seed, fertilizer,
9    utilities, and land rents;
10        (3) marketing and distribution expenses;
11        (4) family living expenses;
12        (5) purchase of livestock, equipment, and other
13    materials essential to farm operations;
14        (6) minor farm improvements such as wells and coolers;
15        (7) hoop houses to extend the growing season;
16        (8) essential tools;
17        (9) irrigation; and
18        (10) delivery vehicles.
19    (d) Lenders shall apply for the State guarantees on forms
20provided by the Authority and certify that the application and
21any other documents submitted are true and correct. The lender
22or borrower, or both in combination, shall pay an
23administrative fee as determined by the Authority. The
24applicant shall be responsible for paying any fee or charge
25involved in recording mortgages, releases, financing
26statements, insurance for secondary market issues, and any

 

 

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1other similar fee or charge that the Authority may require. The
2application shall at a minimum contain the applicant's name,
3address, present credit and financial information, including
4cash flow statements, financial statements, balance sheets,
5and any other information pertinent to the application, and the
6collateral to be used to secure the State guarantee. In
7addition, the borrower must certify to the Authority that, at
8the time the State guarantee is provided, the borrower is not
9delinquent in the repayment of any debt. The lender must agree
10to charge a fixed or adjustable interest rate that the
11Authority determines to be below the market rate of interest
12generally available to the borrower. If both the lender and
13applicant agree, the interest rate on the State guaranteed loan
14can be converted to a fixed interest rate at any time during
15the term of the loan. An applicant may use this program more
16than once. No State guarantee shall be revoked by the Authority
17without a 90-day notice, in writing, to all parties.
18    (e) The Illinois Agricultural Loan Guarantee Fund and the
19Illinois Farmer and Agribusiness Loan Guarantee Fund may be
20used to secure State guarantees issued under this Section.
21    (f) The Authority may adopt rules establishing the
22eligibility of farmers and lenders to participate in the
23program under this Section.