093_SB1211eng

 
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 1        AN ACT concerning farm development.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The Illinois Farm Development Act is amended
 5    by changing  Sections  2,  12.1,  12.2,  12.4,  and  12.5  as
 6    follows:

 7        (20 ILCS 3605/2) (from Ch. 5, par. 1202)
 8        Sec. 2.  As used in this Act: (a) "Affiliate" means, with
 9    respect  to  any  Lender,  any  person,  firm  or corporation
10    controlled by, or under common control with, such Lender, and
11    any person, firm or corporation controlling such Lender.
12        (b)  "Agricultural Facility" means land, any building  or
13    other  improvement  thereon  or  thereto,  and  any  personal
14    properties  deemed  necessary or suitable for use, whether or
15    not now in existence, in farming, ranching, the production of
16    agricultural commodities (including, without limitation,  the
17    products of aquaculture, hydroponics and silviculture) or the
18    treating,   processing   or   storing  of  such  agricultural
19    commodities when such activities are customarily  engaged  in
20    by farmers as a part of farming.
21        (c)  "Authority"  means  the  Illinois  Farm  Development
22    Authority created in this Act.
23        (d)  "Board" means the governing body of the Authority.
24        (e)  "Bonds"   means  and  shall  include  bonds,  notes,
25    certificates, bond, grant or revenue  anticipation  notes  or
26    any other evidence of indebtedness representing an obligation
27    to pay money.
28        (f)  "Lender"  means any federal or State chartered bank,
29    Federal Land Bank, Production Credit  Association,  Bank  for
30    Cooperatives,  federal  or  State  chartered savings and loan
31    association or building and loan association, Small  Business
 
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 1    Investment  Company or any other institution qualified within
 2    this State to originate and  service  loans,  including,  but
 3    without limitation to, insurance companies, credit unions and
 4    mortgage  loan companies.  "Lender" also means a wholly owned
 5    subsidiary of a manufacturer, seller or distributor of  goods
 6    or  services  that  makes loans to businesses or individuals,
 7    commonly known as a "captive finance company".
 8        (g)  "Person" means, unless limited to a  natural  person
 9    by  the  context  in which it is used, a person, corporation,
10    association, trust, partnership or cooperative.
11        (h)  "State" means the State of Illinois.
12        (i)  "Agribusiness"  means   any   sole   proprietorship,
13    limited    partnership,    copartnership,    joint   venture,
14    corporation or cooperative which operates or will  operate  a
15    facility located within the State of Illinois that is related
16    to  the  processing  of  agricultural commodities (including,
17    without limitation, the products of aquaculture,  hydroponics
18    and   silviculture)   or  the  manufacturing,  production  or
19    construction   of   agricultural    buildings,    structures,
20    equipment,  implements, and supplies, or any other facilities
21    or processes used in agricultural  production.   Agribusiness
22    includes but is not limited to the following:
23        (1)  grain   handling  and  processing,  including  grain
24    storage,  drying,  treatment,   conditioning,   milling   and
25    packaging;
26        (2)  seed and feed grain development and processing;
27        (3)  fruit    and    vegetable    processing,   including
28    preparation, canning and packaging;
29        (4)  processing  of  livestock  and  livestock  products,
30    dairy  products,  poultry  and  poultry  products,  fish   or
31    apiarian products, including slaughter, shearing, collecting,
32    preparation, canning and packaging;
33        (5)  fertilizer  and agricultural chemical manufacturing,
34    processing, application and supplying;
 
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 1        (6)  farm    machinery,    equipment    and     implement
 2    manufacturing and supplying;
 3        (7)  manufacturing    and   supplying   of   agricultural
 4    commodity  processing  machinery  and  equipment,   including
 5    machinery   and   equipment  used  in  slaughter,  treatment,
 6    handling, collecting, preparation, canning  or  packaging  of
 7    agricultural commodities;
 8        (8)  farm  building  and  farm  structure  manufacturing,
 9    construction and supplying;
10        (9)  construction,     manufacturing,     implementation,
11    supplying  or  servicing of irrigation, drainage and soil and
12    water conservation devices or equipment;
13        (10)  fuel processing  and  development  facilities  that
14    produce fuel from agricultural commodities or by-products;
15        (11)  facilities   and   equipment   for  processing  and
16    packaging agricultural commodities specifically for export;
17        (12)  facilities  and  equipment  for  forestry   product
18    processing  and  supplying,  including sawmilling operations,
19    wood  chip  operations,  timber  harvesting  operations,  and
20    manufacturing of prefabricated buildings, paper, furniture or
21    other goods from forestry products;
22        (13)  facilities   and   equipment   for   research   and
23    development of products,  processes  and  equipment  for  the
24    production,   processing,   preparation   or   packaging   of
25    agricultural commodities and by-products.
26        (j)  "Fund"   means   the   Illinois   Agricultural  Loan
27    Guarantee Fund established pursuant to Section 12.1  of  this
28    Act.
29        (k)  "State  Guarantee" means a note held by a person for
30    which the State of Illinois shall be liable for  90%  85%  of
31    the total principal and interest of the note as determined by
32    the Authority.
33        (l)  "Asset"  shall  include,  but  not be limited to the
34    following:  cash crops or feed on hand;  livestock  held  for
 
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 1    sale;   breeding  stock;  marketable  bonds  and  securities;
 2    securities not readily marketable; accounts receivable; notes
 3    receivable; cash invested in growing crops; net cash value of
 4    life insurance; machinery and  equipment;  cars  and  trucks;
 5    farm  and  other  real  estate  including  life  estates  and
 6    personal  residence; value of beneficial interests in trusts;
 7    government payments or grants; and any other assets.
 8        (m)  "Liability" shall include, but not be limited to the
 9    following: accounts payable; notes or other indebtedness owed
10    to any source; taxes;  rent;  amounts  owed  on  real  estate
11    contracts   or  real  estate  mortgages;  judgments;  accrued
12    interest payable; and any other liability.
13    (Source: P.A. 85-293.)

14        (20 ILCS 3605/12.1) (from Ch. 5, par. 1212.1)
15        Sec. 12.1.  State Guarantees for existing debt.
16        (a)  The  Authority  is   authorized   to   issue   State
17    Guarantees  for farmers' existing debts held by a lender. For
18    the purposes of this Section, a farmer shall be a resident of
19    Illinois, who is a principal operator of a farm or  land,  at
20    least  50%  of  whose  annual  gross  income  is derived from
21    farming and whose debt to asset ratio shall not be less  than
22    40%, except in those cases where the applicant has previously
23    used  the  guarantee  program there shall be no debt to asset
24    ratio or  income  restriction.   For  the  purposes  of  this
25    Section,   debt   to  asset  ratio  shall  mean  the  current
26    outstanding liabilities of the farmer divided by the  current
27    outstanding  assets  of  the  farmer.   The  Authority  shall
28    establish  the  maximum permissible debt to asset ratio based
29    on criteria established by the Authority.
30        Lenders shall apply for the  State  Guarantees  on  forms
31    provided  by  the  Authority and certify that the application
32    and any other documents submitted are true and correct.   The
33    lender  or  borrower,  or  both  in combination, shall pay an
 
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 1    administrative fee  as  determined  by  the  Authority.   The
 2    applicant shall be responsible for paying any fees or charges
 3    involved   in   recording   mortgages,   releases,  financing
 4    statements, insurance for secondary  market  issues  and  any
 5    other  similar  fees or charges as the Authority may require.
 6    The application shall at a minimum contain the farmer's name,
 7    address, present credit and financial information,  including
 8    cash  flow  statements, financial statements, balance sheets,
 9    and any other information pertinent to the  application,  and
10    the  collateral to be used to secure the State Guarantee.  In
11    addition, the lender must agree to bring the farmer's debt to
12    a current status at the time the State Guarantee is  provided
13    and  must also agree to charge a fixed or adjustable interest
14    rate which the Authority determines to be  below  the  market
15    rate  of  interest  generally  available to the borrower.  If
16    both the lender and applicant agree, the interest rate on the
17    State Guarantee Loan can be converted  to  a  fixed  interest
18    rate at any time during the term of the loan.
19        Any  State  Guarantees  provided  under  this Section (i)
20    shall not exceed $500,000 per farmer, (ii) shall be set up on
21    a payment schedule not to exceed 30 years, and  shall  be  no
22    longer  than 30 years in duration, and (iii) shall be subject
23    to an annual  review  and  renewal  by  the  lender  and  the
24    Authority;  provided that only one such State Guarantee shall
25    be  outstanding  per  farmer  at  any  one  time.   No  State
26    Guarantee shall be revoked by the Authority without a 90  day
27    notice,  in writing, to all parties.  In those cases were the
28    borrower has not previously used the guarantee  program,  the
29    lender  shall  not call due any loan during the first 3 years
30    for any reason except for lack of performance or insufficient
31    collateral. The lender can review and  withdraw  or  continue
32    with the State Guarantee on an annual basis after the first 3
33    years  of  the loan, provided a 90 day notice, in writing, to
34    all parties has been given.
 
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 1        (b)  The  Authority  shall  provide  or  renew  a   State
 2    Guarantee to a lender if:
 3             (i)  A  fee  equal to 25 basis points on the loan is
 4        paid to the Authority on an annual basis by the lender.
 5             (ii)  The application provides collateral acceptable
 6        to the Authority that is at least equal  to  the  State's
 7        portion of the Guarantee to be provided.
 8             (iii)  The  lender  assumes  all  responsibility and
 9        costs for pursuing legal action on  collecting  any  loan
10        that is delinquent or in default.
11             (iv)  The  lender  is  responsible for the first 10%
12        15% of the outstanding principal of the  note  for  which
13        the State Guarantee has been applied.
14        (c)  There   is  hereby  created  outside  of  the  State
15    Treasury  a  special  fund  to  be  known  as  the   Illinois
16    Agricultural  Loan Guarantee Fund.  The State Treasurer shall
17    be custodian of this  Fund.   Any  amounts  in  the  Illinois
18    Agricultural Loan Guarantee Fund not currently needed to meet
19    the  obligations of the Fund shall be invested as provided by
20    law, and all interest earned from these investments shall  be
21    deposited  into  the  Fund until the Fund reaches the maximum
22    amount authorized in this Act;  thereafter,  interest  earned
23    shall  be  deposited  into  the  General  Revenue Fund. After
24    September 1, 1989, annual investment earnings equal  to  1.5%
25    of  the  Fund  shall  remain  in  the Fund to be used for the
26    purposes established in Section 12.3 of this Act.
27        The Authority is authorized to transfer to the Fund  such
28    amounts  as  are  necessary  to  satisfy  claims  during  the
29    duration  of  the  State  Guarantee  program  to secure State
30    Guarantees issued under this Section. If for any  reason  the
31    General Assembly fails to make an appropriation sufficient to
32    meet   these   obligations,  this  Act  shall  constitute  an
33    irrevocable  and  continuing  appropriation  of   an   amount
34    necessary  to  secure  guarantees  as  defaults occur and the
 
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 1    irrevocable and continuing authority for, and  direction  to,
 2    the State Treasurer and the Comptroller to make the necessary
 3    transfers  to  the Illinois Agricultural Loan Guarantee Fund,
 4    as directed by the Governor, out of the General Revenue Fund.
 5        Within 30 days after November 15, 1985, the Authority may
 6    transfer up to $7,000,000 from available appropriations  into
 7    the   Illinois  Agricultural  Loan  Guarantee  Fund  for  the
 8    purposes of this Act.  Thereafter, the Authority may transfer
 9    additional  amounts  into  the  Illinois  Agricultural   Loan
10    Guarantee  Fund to secure guarantees for defaults as defaults
11    occur.
12        In the event of default by the farmer, the  lender  shall
13    be  entitled  to,  and the Authority shall direct payment on,
14    the State  Guarantee  after  90  days  of  delinquency.   All
15    payments  by  the  Authority  shall be made from the Illinois
16    Agricultural Loan Guarantee Fund to  satisfy  claims  against
17    the   State   Guarantee.    The  Illinois  Agricultural  Loan
18    Guarantee Fund shall guarantee receipt of payment of the  90%
19    85% of the principal and interest owed on the State Guarantee
20    Loan by the farmer to the guarantee holder.
21        It  shall  be the responsibility of the lender to proceed
22    with the collecting and disposing of collateral on the  State
23    Guarantee within 14 months of the time the State Guarantee is
24    declared delinquent; provided, however, that the lender shall
25    not  collect  or dispose of collateral on the State Guarantee
26    without the express written prior approval of the  Authority.
27    If  the  lender  does not dispose of the collateral within 14
28    months, the lender shall be liable  to  repay  to  the  State
29    interest  on the State Guarantee equal to the same rate which
30    the lender charges on the State Guarantee; provided, however,
31    that the Authority may extend  the  14  month  period  for  a
32    lender   in   the   case   of   bankruptcy   or   extenuating
33    circumstances.  The  Fund shall be reimbursed for any amounts
34    paid under this Section upon liquidation of  the  collateral.
 
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 1    The  Authority,  by  resolution of the Board, may borrow sums
 2    from the Fund and provide for repayment as  soon  as  may  be
 3    practical  upon receipt of payments of principal and interest
 4    by a farmer. Money may be  borrowed  from  the  Fund  by  the
 5    Authority  for  the  sole  purpose of paying certain interest
 6    costs for farmers associated with selling a loan subject to a
 7    State Guarantee in  a  secondary  market  as  may  be  deemed
 8    reasonable and necessary by the Authority.
 9        (d)  Notwithstanding  the provisions of this Section 12.1
10    with respect to the farmers and lenders who may obtain  State
11    Guarantees,  the  Authority may promulgate rules establishing
12    the eligibility of farmers and lenders to participate in  the
13    State   guarantee  program  and  the  terms,  standards,  and
14    procedures that will apply, when  the  Authority  finds  that
15    emergency conditions in Illinois agriculture have created the
16    need  for  State Guarantees pursuant to terms, standards, and
17    procedures other than those specified in this Section.
18    (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.)

19        (20 ILCS 3605/12.2) (from Ch. 5, par. 1212.2)
20        Sec. 12.2.  State Guarantees for  loans  to  farmers  and
21    agribusiness; eligibility.
22        (a)  The   Authority   is   authorized   to  issue  State
23    Guarantees to lenders  for  loans  to  eligible  farmers  and
24    agribusinesses  for  purposes  set forth in this Section. For
25    purposes of this Section,  an  eligible  farmer  shall  be  a
26    resident  of Illinois (i) who is principal operator of a farm
27    or land, at least 50% of whose annual gross income is derived
28    from farming, (ii) whose annual total sales  of  agricultural
29    products,  commodities,  or  livestock  exceeds  $20,000, and
30    (iii) whose net worth does not exceed $500,000.  An  eligible
31    agribusiness  shall  be  that as defined in Section 2 of this
32    Act.
33        The Authority may approve  applications  by  farmers  and
 
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 1    agribusinesses  that  promote  diversification  of  the  farm
 2    economy  of  this State through the growth and development of
 3    new crops or livestock not customarily grown or  produced  in
 4    this  State or that emphasize a vertical integration of grain
 5    or livestock produced or raised in this State into a finished
 6    agricultural product for consumption or use.  "New  crops  or
 7    livestock  not  customarily  grown or produced in this State"
 8    shall not include corn, soybeans, wheat, swine,  or  beef  or
 9    dairy  cattle.  "Vertical  integration  of grain or livestock
10    produced or raised in this State" shall include  any  new  or
11    existing grain or livestock grown or produced in this State.
12        Lenders  shall  apply  for  the State Guarantees on forms
13    provided by the Authority, certify that the  application  and
14    any  other  documents submitted are true and correct, and pay
15    an administrative fee as determined by  the  Authority.   The
16    applicant shall be responsible for paying any fees or charges
17    involved   in   recording   mortgages,   releases,  financing
18    statements, insurance for secondary  market  issues  and  any
19    other  similar  fees or charges as the Authority may require.
20    The application shall at a minimum contain  the  farmer's  or
21    agribusiness'  name,  address,  present  credit and financial
22    information,  including  cash  flow   statements,   financial
23    statements,   balance   sheets,  and  any  other  information
24    pertinent to the application, and the collateral to  be  used
25    to  secure the State Guarantee.  In addition, the lender must
26    agree to charge an interest rate, which may vary, on the loan
27    that the Authority determines to be below the market rate  of
28    interest  generally  available  to  the borrower. If both the
29    lender and applicant agree, the interest rate  on  the  State
30    Guarantee  Loan  can be converted to a fixed interest rate at
31    any time during the term of the loan.
32        Any State Guarantees  provided  under  this  Section  (i)
33    shall  not  exceed  $500,000  per  farmer  or  an  amount  as
34    determined  by  the  Authority on a case-by-case basis for an
 
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 1    agribusiness, (ii) shall not exceed a term of 15  years,  and
 2    (iii) shall be subject to an annual review and renewal by the
 3    lender  and  the Authority; provided that only one such State
 4    Guarantee shall be made per farmer  or  agribusiness,  except
 5    that  additional State Guarantees may be made for purposes of
 6    expansion of projects financed in part by a previously issued
 7    State Guarantee.  No State Guarantee shall be revoked by  the
 8    Authority  without  a  90  day  notice,  in  writing,  to all
 9    parties.  The lender shall not call  due  any  loan  for  any
10    reason   except   for   lack   of  performance,  insufficient
11    collateral, or maturity.  A lender may review and withdraw or
12    continue with a State Guarantee on an annual basis after  the
13    first  5  years  following closing of the loan application if
14    the loan contract provides for an interest  rate  that  shall
15    not  vary.   A lender shall not withdraw a State Guarantee if
16    the loan contract provides for  an  interest  rate  that  may
17    vary, except for reasons set forth herein.
18        (b)  The   Authority  shall  provide  or  renew  a  State
19    Guarantee to a lender if:
20             i.  A fee equal to 25 basis points on  the  loan  is
21        paid to the Authority on an annual basis by the lender.
22             ii.  The  application provides collateral acceptable
23        to the Authority that is at least equal  to  the  State's
24        portion of the Guarantee to be provided.
25             iii.  The  lender  assumes  all  responsibility  and
26        costs  for  pursuing  legal action on collecting any loan
27        that is delinquent or in default.
28             iv.  The lender is responsible for the first 10% 15%
29        of the outstanding principal of the note  for  which  the
30        State Guarantee has been applied.
31        (c)  There   is  hereby  created  outside  of  the  State
32    Treasury a special fund to be known as  the  Illinois  Farmer
33    and  Agribusiness  Loan  Guarantee Fund.  The State Treasurer
34    shall be custodian of this Fund.  Any amounts in the Fund not
 
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 1    currently needed to meet the obligations of the Fund shall be
 2    invested as provided by law, and  all  interest  earned  from
 3    these  investments shall be deposited into the Fund until the
 4    Fund reaches the maximum  amounts  authorized  in  this  Act;
 5    thereafter,  interest  earned  shall  be  deposited  into the
 6    General  Revenue  Fund.  After  September  1,  1989,   annual
 7    investment earnings equal to 1.5% of the Fund shall remain in
 8    the  Fund  to be used for the purposes established in Section
 9    12.3 of this Act.
10        The Authority is authorized to transfer such  amounts  as
11    are necessary to satisfy claims from available appropriations
12    and  from fund balances of the Farm Emergency Assistance Fund
13    as of June 30  of  each  year  to  the  Illinois  Farmer  and
14    Agribusiness  Loan  Guarantee Fund to secure State Guarantees
15    issued under this Section and Sections 12.4 and 12.5. If  for
16    any   reason   the   General   Assembly   fails  to  make  an
17    appropriation sufficient to meet these obligations, this  Act
18    shall  constitute an irrevocable and continuing appropriation
19    of an amount necessary to secure guarantees as defaults occur
20    and  the  irrevocable  and  continuing  authority  for,   and
21    direction to, the State Treasurer and the Comptroller to make
22    the   necessary   transfers   to   the  Illinois  Farmer  and
23    Agribusiness  Loan  Guarantee  Fund,  as  directed   by   the
24    Governor, out of the General Revenue Fund.
25        In  the  event  of  default  by  the  borrower  on  State
26    Guarantee  Loans under this Section, Section 12.4, or Section
27    12.5, the lender shall be  entitled  to,  and  the  Authority
28    shall direct payment on, the State Guarantee after 90 days of
29    delinquency.   All  payments  by  the Authority shall be made
30    from the Illinois Farmer and Agribusiness Loan Guarantee Fund
31    to satisfy claims against the State Guarantee.
32        It shall be the responsibility of the lender  to  proceed
33    with  the collecting and disposing of collateral on the State
34    Guarantee under this Section, Section 12.4, or  Section  12.5
 
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 1    within  14 months of the time the State Guarantee is declared
 2    delinquent.  If the lender does not dispose of the collateral
 3    within 14 months, the lender shall be liable to repay to  the
 4    State  interest on the State Guarantee equal to the same rate
 5    that the lender charges on the State Guarantee, provided that
 6    the Authority shall have the authority to extend the 14 month
 7    period for a lender in the case of bankruptcy or  extenuating
 8    circumstances.  The  Fund shall be reimbursed for any amounts
 9    paid under this Section, Section 12.4, or Section  12.5  upon
10    liquidation of the collateral.
11        The  Authority,  by  resolution  of the Board, may borrow
12    sums from the Fund and provide for repayment as soon  as  may
13    be  practical  upon  receipt  of  payments  of  principal and
14    interest by a borrower on State Guarantee  Loans  under  this
15    Section, Section 12.4, or Section 12.5. Money may be borrowed
16    from the Fund by the Authority for the sole purpose of paying
17    certain  interest costs for borrowers associated with selling
18    a loan subject to  a  State  Guarantee  under  this  Section,
19    Section 12.4, or Section 12.5 in a secondary market as may be
20    deemed reasonable and necessary by the Authority.
21        (d)  Notwithstanding  the provisions of this Section 12.2
22    with respect to the farmers, agribusinesses, and lenders  who
23    may  obtain  State  Guarantees,  the Authority may promulgate
24    rules    establishing    the    eligibility    of    farmers,
25    agribusinesses, and  lenders  to  participate  in  the  State
26    Guarantee  program  and  the terms, standards, and procedures
27    that will apply, when  the  Authority  finds  that  emergency
28    conditions  in Illinois agriculture have created the need for
29    State Guarantees pursuant to terms, standards, and procedures
30    other than those specified in this Section.
31    (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.)

32        (20 ILCS 3605/12.4) (from Ch. 5, par. 1212.4)
33        Sec. 12.4.  Young Farmer Loan Guarantee Program.
 
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 1        (a)  The  Authority  is   authorized   to   issue   State
 2    Guarantees to lenders for loans to finance or refinance debts
 3    of  young farmers.  For the purposes of this Section, a young
 4    farmer is a resident of Illinois who is at least 18 years  of
 5    age  and  who  is a principal operator of a farm or land, who
 6    derives at least 50% of annual  gross  income  from  farming,
 7    whose  net  worth  is not less than $10,000 and whose debt to
 8    asset ratio is not less than 40%. For the  purposes  of  this
 9    Section,  debt  to  asset  ratio  means  current  outstanding
10    liabilities,  including any debt to be financed or refinanced
11    under this Section, divided by  current  outstanding  assets.
12    The Authority shall establish the maximum permissible debt to
13    asset ratio based on criteria established by the Authority.
14        Lenders  shall  apply  for  the State Guarantees on forms
15    provided by the Authority and certify  that  the  application
16    and  any other documents submitted are true and correct.  The
17    lender or borrower, or both  in  combination,  shall  pay  an
18    administrative  fee  as  determined  by  the  Authority.  The
19    applicant shall be responsible for paying any fee  or  charge
20    involved   in   recording   mortgages,   releases,  financing
21    statements, insurance for secondary market  issues,  and  any
22    other  similar  fee or charge that the Authority may require.
23    The application shall at a minimum contain the young farmer's
24    name, address,  present  credit  and  financial  information,
25    including cash flow statements, financial statements, balance
26    sheets,   and   any   other   information  pertinent  to  the
27    application, and the collateral to  be  used  to  secure  the
28    State  Guarantee.   In addition, the borrower must certify to
29    the Authority that,  at  the  time  the  State  Guarantee  is
30    provided,   the  borrower  will  not  be  delinquent  in  the
31    repayment of any debt.  The lender must  agree  to  charge  a
32    fixed   or   adjustable  interest  rate  that  the  Authority
33    determines to be below the market rate of interest  generally
34    available  to the borrower.  If both the lender and applicant
 
SB1211 Engrossed            -14-     LRB093 07702 BDD 07890 b
 1    agree, the interest rate on the State guaranteed loan can  be
 2    converted  to  a  fixed  interest rate at any time during the
 3    term of the loan.
 4        State Guarantees provided under this  Section  (i)  shall
 5    not exceed $500,000 per young farmer, (ii) shall be set up on
 6    a  payment  schedule  not to exceed 30 years, but shall be no
 7    longer than 15 years in duration, and (iii) shall be  subject
 8    to  an  annual  review  and  renewal  by  the  lender and the
 9    Authority. A young farmer may use this program more than once
10    provided the aggregate principal amount of  State  Guarantees
11    under  this  Section  to  that  young  farmer does not exceed
12    $500,000.   No  State  Guarantee  shall  be  revoked  by  the
13    Authority without  a  90  day  notice,  in  writing,  to  all
14    parties.
15        (b)  The   Authority  shall  provide  or  renew  a  State
16    Guarantee to a lender if:
17             (i)  The lender pays a fee equal to 25 basis  points
18        on the loan to the Authority on an annual basis.
19             (ii)  The application provides collateral acceptable
20        to  the  Authority  that  is  at least equal to the State
21        Guarantee.
22             (iii)  The lender  assumes  all  responsibility  and
23        costs  for  pursuing  legal action on collecting any loan
24        that is delinquent or in default.
25             (iv)  The lender is at risk for the first 10% 15% of
26        the outstanding principal of the note for which the State
27        Guarantee is provided.
28        (c)  The Illinois Farmer and Agribusiness Loan  Guarantee
29    Fund may be used to secure State Guarantees issued under this
30    Section as provided in Section 12.2.
31        (d)  Notwithstanding  the provisions of this Section 12.4
32    with respect to the young farmers and lenders who may  obtain
33    State   Guarantees,   the   Authority  may  promulgate  rules
34    establishing the eligibility of young farmers and lenders  to
 
SB1211 Engrossed            -15-     LRB093 07702 BDD 07890 b
 1    participate  in  the  State  Guarantee program and the terms,
 2    standards, and procedures that will apply, when the Authority
 3    finds that emergency conditions in Illinois agriculture  have
 4    created  the  need  for  State  Guarantees pursuant to terms,
 5    standards, and procedures other than those specified in  this
 6    Section.
 7    (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.)

 8        (20 ILCS 3605/12.5)
 9        Sec. 12.5.  Specialized Livestock Guarantee Program.
10        (a)  The   Authority   is   authorized   to  issue  State
11    Guarantees to lenders for loans to finance or refinance debts
12    for specialized livestock operations  that  are  or  will  be
13    located  in  Illinois.   For  purposes  of  this  Section,  a
14    "specialized   livestock  operation"  includes,  but  is  not
15    limited to, dairy, beef, and swine enterprises.
16        (b)  Lenders shall apply  for  the  State  Guarantees  on
17    forms   provided  by  the  Authority  and  certify  that  the
18    application and any other documents submitted  are  true  and
19    correct.   The  lender  or  borrower, or both in combination,
20    shall  pay  an  administrative  fee  as  determined  by   the
21    Authority.  The applicant shall be responsible for paying any
22    fee  or  charge  involved  in  recording mortgages, releases,
23    financing statements, insurance for secondary market  issues,
24    and  any  other  similar fee or charge that the Authority may
25    require.  The application shall, at a  minimum,  contain  the
26    farmer's   name,   address,   present  credit  and  financial
27    information,  including  cash  flow   statements,   financial
28    statements,   balance   sheets,  and  any  other  information
29    pertinent to the application, and the collateral to  be  used
30    to  secure  the  State  Guarantee.  In addition, the borrower
31    must certify to the Authority that, at  the  time  the  State
32    Guarantee is provided, the borrower will not be delinquent in
33    the repayment of any debt.  The lender must agree to charge a
 
SB1211 Engrossed            -16-     LRB093 07702 BDD 07890 b
 1    fixed   or   adjustable  interest  rate  that  the  Authority
 2    determines to be below the market rate of interest  generally
 3    available  to the borrower.  If both the lender and applicant
 4    agree, the interest rate on the State guaranteed loan can  be
 5    converted  to  a  fixed  interest rate at any time during the
 6    term of the loan.
 7        (c)  State Guarantees provided  under  this  Section  (i)
 8    shall  not  exceed $1,000,000 per applicant, (ii) shall be no
 9    longer  than 15 years in duration, and (iii) shall be subject
10    to an annual  review  and  renewal  by  the  lender  and  the
11    Authority.  An applicant may use this program more than once,
12    provided  that  the  aggregate  principal  amount  of   State
13    Guarantees  under  this  Section  to  that applicant does not
14    exceed $1,000,000.  A State Guarantee shall not be revoked by
15    the Authority without a 90-day notice,  in  writing,  to  all
16    parties.
17        (d)  The   Authority  shall  provide  or  renew  a  State
18    Guarantee to a lender if:
19             (i)  The lender pays a fee equal to 25 basis  points
20        on the loan to the Authority on an annual basis.
21             (ii)  The application provides collateral acceptable
22        to  the  Authority  that  is  at least equal to the State
23        Guarantee.
24             (iii)  The lender  assumes  all  responsibility  and
25        costs  for  pursuing  legal action on collecting any loan
26        that is delinquent or in default.
27             (iv)  The lender is at risk for the first 10% 15% of
28        the outstanding principal of the note for which the State
29        Guarantee is provided.
30        (e)  The Illinois Farmer and Agribusiness Loan  Guarantee
31    Fund may be used to secure State Guarantees issued under this
32    Section as provided in Section 12.2.
33        (f)  Notwithstanding  the provisions of this Section 12.5
34    with respect to  the  specialized  livestock  operations  and
 
SB1211 Engrossed            -17-     LRB093 07702 BDD 07890 b
 1    lenders  who  may  obtain State Guarantees, the Authority may
 2    promulgate rules establishing the eligibility of  specialized
 3    livestock  operations and lenders to participate in the State
 4    Guarantee program and the terms,  standards,  and  procedures
 5    that  will  apply,  when  the  Authority finds that emergency
 6    conditions in Illinois agriculture have created the need  for
 7    State Guarantees pursuant to terms, standards, and procedures
 8    other than those specified in this Section.
 9    (Source: P.A. 91-386, eff. 1-1-00.)

10        Section  99.  Effective date.  This Act takes effect upon
11    becoming law.