[ Search ] [ Legislation ] [ Bill Summary ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] |
90_HB1880enr
20 ILCS 3605/11 from Ch. 5, par. 1211
20 ILCS 3605/12.1 from Ch. 5, par. 1212.1
20 ILCS 3605/12.2 from Ch. 5, par. 1212.2
20 ILCS 3605/12.4 from Ch. 5, par. 1212.4
Amends the Illinois Farm Development Act. Provides that
the Illinois Farm Development Authority shall not have
outstanding State Guarantees in an aggregate principal amount
exceeding $50,000,000 (now $35,000,000). Provides that there
shall be no income restriction for applicants who have
previously used the guarantee program. Provides that
guarantees shall not exceed $500,000 (now $300,000) per
farmer. Provides that in those cases where the borrower has
not previously used the guarantee program, the lender shall
not call the loan due during the first 3 years for any reason
except lack of performance or insufficient collateral.
Provides that interest earned from amounts invested from the
Illinois Agricultural Loan Guarantee Fund and the Illinois
Farmer and Agribusiness Loan Guarantee Fund shall be
deposited into those funds until the Funds reach their
maximum amounts. Provides that after the Funds reach their
maximum amounts the interest shall be deposited into the
General Revenue Fund. Provides that the Authority may
transfer $15,000,000 (now $10,000,000) from appropriations
and the Farm Emergency Assistance Fund as of June 30 of each
year to the Illinois Farmer and Agribusiness Loan Guarantee
Fund. Makes other changes. Effective immediately.
LRB9003959MWksA
HB1880 Enrolled LRB9003959MWksA
1 AN ACT to amend the Illinois Farm Development Act by
2 changing Sections 11, 12.1, 12.2, and 12.4.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Farm Development Act is amended
6 by changing Sections 11, 12.1, 12.2, and 12.4 as follows:
7 (20 ILCS 3605/11) (from Ch. 5, par. 1211)
8 Sec. 11. Bonded indebtedness limitation. The Authority
9 shall not have outstanding at any one time bonds and notes
10 for any of its corporate purposes in an aggregate principal
11 amount exceeding $300,000,000, $50,000,000 of which shall be
12 used for research and development purposes, excluding bonds
13 and notes issued to refund outstanding bonds and notes and
14 excluding the State Guarantees under Sections 12.1, 12.2,
15 12.4, and 12.5. The Authority shall not have outstanding at
16 any one time State Guarantees under Section 12.1 in an
17 aggregate principal amount exceeding $160,000,000. The
18 Authority shall not have outstanding at any one time State
19 Guarantees under Sections 12.2, 12.4, and 12.5 in an
20 aggregate principal amount exceeding $50,000,000 $35,000,000.
21 (Source: P.A. 89-527, eff. 7-19-96.)
22 (20 ILCS 3605/12.1) (from Ch. 5, par. 1212.1)
23 Sec. 12.1. State Guarantees for existing debt.
24 (a) The Authority is authorized to issue State
25 Guarantees for farmers' existing debts held by a lender. For
26 the purposes of this Section, a farmer shall be a resident of
27 Illinois, who is a principal operator of a farm or land, at
28 least 50% of whose annual gross income is derived from
29 farming and whose debt to asset ratio shall not be less than
30 40%, except in those cases where the applicant has previously
HB1880 Enrolled -2- LRB9003959MWksA
1 used the guarantee program there shall be no debt to asset
2 ratio or income restriction. For the purposes of this
3 Section, debt to asset ratio shall mean the current
4 outstanding liabilities of the farmer divided by the current
5 outstanding assets of the farmer. The Authority shall
6 establish the maximum permissible debt to asset ratio based
7 on criteria established by the Authority.
8 Lenders shall apply for the State Guarantees on forms
9 provided by the Authority and certify that the application
10 and any other documents submitted are true and correct. The
11 lender or borrower, or both in combination, shall pay an
12 administrative fee as determined by the Authority. The
13 applicant shall be responsible for paying any fees or charges
14 involved in recording mortgages, releases, financing
15 statements, insurance for secondary market issues and any
16 other similar fees or charges as the Authority may require.
17 The application shall at a minimum contain the farmer's name,
18 address, present credit and financial information, including
19 cash flow statements, financial statements, balance sheets,
20 and any other information pertinent to the application, and
21 the collateral to be used to secure the State Guarantee. In
22 addition, the lender must agree to bring the farmer's debt to
23 a current status at the time the State Guarantee is provided
24 and must also agree to charge a fixed or adjustable interest
25 rate which the Authority determines to be below the market
26 rate of interest generally available to the borrower. If
27 both the lender and applicant agree, the interest rate on the
28 State Guarantee Loan can be converted to a fixed interest
29 rate at any time during the term of the loan.
30 Any State Guarantees provided under this Section (i)
31 shall not exceed $500,000 $300,000 per farmer, (ii) shall be
32 set up on a payment schedule not to exceed 30 years, and but
33 shall be no longer than 30 10 years in duration, and (iii)
34 shall be subject to an annual review and renewal by the
HB1880 Enrolled -3- LRB9003959MWksA
1 lender and the Authority; provided that only one such State
2 Guarantee shall be outstanding per farmer at any one time.
3 No State Guarantee shall be revoked by the Authority without
4 a 90 day notice, in writing, to all parties. In those cases
5 were the borrower has not previously used the guarantee
6 program, the lender shall not call due any loan during the
7 first 3 years for any reason except for lack of performance
8 or insufficient collateral. The lender can review and
9 withdraw or continue with the State Guarantee on an annual
10 basis after the first 3 years of the loan, provided a 90 day
11 notice, in writing, to all parties has been given.
12 (b) The Authority shall provide or renew a State
13 Guarantee to a lender if:
14 (i) A fee equal to 25 basis points on the loan is
15 paid to the Authority on an annual basis by the lender.
16 (ii) The application provides collateral acceptable
17 to the Authority that is at least equal to the State's
18 portion of the Guarantee to be provided.
19 (iii) The lender assumes all responsibility and
20 costs for pursuing legal action on collecting any loan
21 that is delinquent or in default.
22 (iv) The lender is responsible for the first 15% of
23 the outstanding principal of the note for which the State
24 Guarantee has been applied.
25 (c) There is hereby created outside of the State
26 Treasury a special fund to be known as the Illinois
27 Agricultural Loan Guarantee Fund. The State Treasurer shall
28 be custodian of this Fund. Any amounts in the Illinois
29 Agricultural Loan Guarantee Fund not currently needed to meet
30 the obligations of the Fund shall be invested as provided by
31 law, and all interest earned from these investments shall be
32 deposited into the General Revenue Fund until the Fund
33 reaches the maximum amount established in this Section;
34 thereafter, interest earned shall be deposited into the
HB1880 Enrolled -4- LRB9003959MWksA
1 General Revenue Fund., except that After September 1, 1989,
2 annual investment earnings equal to 1.5% of the Fund shall
3 remain in the Fund to be used for the purposes established in
4 Section 12.3 of this Act.
5 The Authority is authorized to transfer no more than
6 $45,000,000 to the Fund during the duration of the State
7 Guarantee program to secure State Guarantees issued under
8 this Section and the State shall not be liable for more than
9 $45,000,000 to secure State Guarantees issued under this
10 Section. If for any reason the General Assembly fails to make
11 an appropriation sufficient to meet these obligations, this
12 Act shall constitute an irrevocable and continuing
13 appropriation of an amount necessary to secure guarantees as
14 defaults occur up to an amount equal to the difference
15 between the $45,000,000 obligation and all amounts previously
16 transferred to the Illinois Agricultural Loan Guarantee Fund
17 and the irrevocable and continuing authority for, and
18 direction to, the State Treasurer and the Comptroller to make
19 the necessary transfers to the Illinois Agricultural Loan
20 Guarantee Fund, as directed by the Governor, out of the
21 General Revenue Fund. Any amounts transferred from the
22 Illinois Agricultural Loan Guarantee Fund to the General
23 Revenue Fund, under powers granted to the Governor by Public
24 Act 87-14, shall not be considered in determining if the
25 maximum of $45,000,000 has been transferred into the Illinois
26 Agricultural Loan Guarantee Fund.
27 Within 30 days after November 15, 1985, the Authority may
28 transfer up to $7,000,000 from available appropriations into
29 the Illinois Agricultural Loan Guarantee Fund for the
30 purposes of this Act. Thereafter, the Authority may transfer
31 additional amounts into the Illinois Agricultural Loan
32 Guarantee Fund to secure guarantees for defaults as defaults
33 occur.
34 In the event of default by the farmer, the lender shall
HB1880 Enrolled -5- LRB9003959MWksA
1 be entitled to, and the Authority shall direct payment on,
2 the State Guarantee after 90 days of delinquency. All
3 payments by the Authority shall be made from the Illinois
4 Agricultural Loan Guarantee Fund to satisfy claims against
5 the State Guarantee. The Illinois Agricultural Loan
6 Guarantee Fund shall guarantee receipt of payment of the 85%
7 of the principal and interest owed on the State Guarantee
8 Loan by the farmer to the guarantee holder.
9 It shall be the responsibility of the lender to proceed
10 with the collecting and disposing of collateral on the State
11 Guarantee within 14 months of the time the State Guarantee is
12 declared delinquent; provided, however, that the lender shall
13 not collect or dispose of collateral on the State Guarantee
14 without the express written prior approval of the Authority.
15 If the lender does not dispose of the collateral within 14
16 months, the lender shall be liable to repay to the State
17 interest on the State Guarantee equal to the same rate which
18 the lender charges on the State Guarantee; provided, however,
19 that the Authority may extend the 14 month period for a
20 lender in the case of bankruptcy or extenuating
21 circumstances. The Fund shall be reimbursed for any amounts
22 paid under this Section upon liquidation of the collateral.
23 The Authority, by resolution of the Board, may borrow sums
24 from the Fund and provide for repayment as soon as may be
25 practical upon receipt of payments of principal and interest
26 by a farmer. Money may be borrowed from the Fund by the
27 Authority for the sole purpose of paying certain interest
28 costs for farmers associated with selling a loan subject to a
29 State Guarantee in a secondary market as may be deemed
30 reasonable and necessary by the Authority.
31 (Source: P.A. 88-571, eff. 8-11-94; 89-154, eff. 7-19-95.)
32 (20 ILCS 3605/12.2) (from Ch. 5, par. 1212.2)
33 Sec. 12.2. State Guarantees for loans to farmers and
HB1880 Enrolled -6- LRB9003959MWksA
1 agribusiness; eligibility.
2 (a) The Authority is authorized to issue State
3 Guarantees to lenders for loans to eligible farmers and
4 agribusinesses for purposes set forth in this Section. For
5 purposes of this Section, an eligible farmer shall be a
6 resident of Illinois (i) who is principal operator of a farm
7 or land, at least 50% of whose annual gross income is derived
8 from farming, (ii) whose annual total sales of agricultural
9 products, commodities, or livestock exceeds $20,000, and
10 (iii) whose net worth does not exceed $500,000. An eligible
11 agribusiness shall be that as defined in Section 2 of this
12 Act.
13 The Authority may approve applications by farmers and
14 agribusinesses that promote diversification of the farm
15 economy of this State through the growth and development of
16 new crops or livestock not customarily grown or produced in
17 this State or that emphasize a vertical integration of grain
18 or livestock produced or raised in this State into a finished
19 agricultural product for consumption or use. "New crops or
20 livestock not customarily grown or produced in this State"
21 shall not include corn, soybeans, wheat, swine, or beef or
22 dairy cattle. "Vertical integration of grain or livestock
23 produced or raised in this State" shall include any new or
24 existing grain or livestock grown or produced in this State.
25 Lenders shall apply for the State Guarantees on forms
26 provided by the Authority, certify that the application and
27 any other documents submitted are true and correct, and pay
28 an administrative fee as determined by the Authority. The
29 applicant shall be responsible for paying any fees or charges
30 involved in recording mortgages, releases, financing
31 statements, insurance for secondary market issues and any
32 other similar fees or charges as the Authority may require.
33 The application shall at a minimum contain the farmer's or
34 agribusiness' name, address, present credit and financial
HB1880 Enrolled -7- LRB9003959MWksA
1 information, including cash flow statements, financial
2 statements, balance sheets, and any other information
3 pertinent to the application, and the collateral to be used
4 to secure the State Guarantee. In addition, the lender must
5 agree to charge an interest rate, which may vary, on the loan
6 that the Authority determines to be below the market rate of
7 interest generally available to the borrower. If both the
8 lender and applicant agree, the interest rate on the State
9 Guarantee Loan can be converted to a fixed interest rate at
10 any time during the term of the loan.
11 Any State Guarantees provided under this Section (i)
12 shall not exceed $500,000 $300,000 per farmer or an amount as
13 determined by the Authority on a case-by-case basis for an
14 agribusiness, (ii) shall not exceed a term of 15 years, and
15 (iii) shall be subject to an annual review and renewal by the
16 lender and the Authority; provided that only one such State
17 Guarantee shall be made per farmer or agribusiness, except
18 that additional State Guarantees may be made for purposes of
19 expansion of projects financed in part by a previously issued
20 State Guarantee. No State Guarantee shall be revoked by the
21 Authority without a 90 day notice, in writing, to all
22 parties. The lender shall not call due any loan for any
23 reason except for lack of performance, insufficient
24 collateral, or maturity. A lender may review and withdraw or
25 continue with a State Guarantee on an annual basis after the
26 first 5 years following closing of the loan application if
27 the loan contract provides for an interest rate that shall
28 not vary. A lender shall not withdraw a State Guarantee if
29 the loan contract provides for an interest rate that may
30 vary, except for reasons set forth herein.
31 (b) The Authority shall provide or renew a State
32 Guarantee to a lender if:
33 i. A fee equal to 25 basis points on the loan is
34 paid to the Authority on an annual basis by the lender.
HB1880 Enrolled -8- LRB9003959MWksA
1 ii. The application provides collateral acceptable
2 to the Authority that is at least equal to the State's
3 portion of the Guarantee to be provided.
4 iii. The lender assumes all responsibility and
5 costs for pursuing legal action on collecting any loan
6 that is delinquent or in default.
7 iv. The lender is responsible for the first 15% of
8 the outstanding principal of the note for which the State
9 Guarantee has been applied.
10 (c) There is hereby created outside of the State
11 Treasury a special fund to be known as the Illinois Farmer
12 and Agribusiness Loan Guarantee Fund. The State Treasurer
13 shall be custodian of this Fund. Any amounts in the Fund not
14 currently needed to meet the obligations of the Fund shall be
15 invested as provided by law, and all interest earned from
16 these investments shall be deposited into the General Revenue
17 Fund until the Fund reaches the maximum amounts established
18 in this Section; thereafter, interest earned shall be
19 deposited into the General Revenue Fund., except that After
20 September 1, 1989, annual investment earnings equal to 1.5%
21 of the Fund shall remain in the Fund to be used for the
22 purposes established in Section 12.3 of this Act.
23 The Authority is authorized to transfer an amount not to
24 exceed $15,000,000 $10,000,000 from available appropriations
25 and from fund balances of the Farm Emergency Assistance Fund
26 as of June 30 of each year to the Illinois Farmer and
27 Agribusiness Loan Guarantee Fund to secure State Guarantees
28 issued under this Section and Section 12.4 and the State
29 shall not be liable for more than $15,000,000 $10,000,000 to
30 secure State Guarantees issued under this Section and Section
31 12.4. If for any reason the General Assembly fails to make an
32 appropriation sufficient to meet these obligations, this Act
33 shall constitute an irrevocable and continuing appropriation
34 of an amount necessary to secure guarantees as defaults occur
HB1880 Enrolled -9- LRB9003959MWksA
1 up to an amount equal to the difference between the
2 $15,000,000 $10,000,000 obligation and all amounts previously
3 transferred to the Illinois Farmer and Agribusiness Loan
4 Guarantee Fund and the irrevocable and continuing authority
5 for, and direction to, the State Treasurer and the
6 Comptroller to make the necessary transfers to the Illinois
7 Farmer and Agribusiness Loan Guarantee Fund, as directed by
8 the Governor, out of the General Revenue Fund.
9 In the event of default by the farmer or agribusiness on
10 State Guarantee Loans under this Section or Section 12.4, the
11 lender shall be entitled to, and the Authority shall direct
12 payment on, the State Guarantee after 90 days of delinquency.
13 All payments by the Authority shall be made from the Illinois
14 Farmer and Agribusiness Loan Guarantee Fund to satisfy claims
15 against the State Guarantee.
16 It shall be the responsibility of the lender to proceed
17 with the collecting and disposing of collateral on the State
18 Guarantee under this Section or Section 12.4 within 14 months
19 of the time the State Guarantee is declared delinquent. If
20 the lender does not dispose of the collateral within 14
21 months, the lender shall be liable to repay to the State
22 interest on the State Guarantee equal to the same rate that
23 the lender charges on the State Guarantee, provided that the
24 Authority shall have the authority to extend the 14 month
25 period for a lender in the case of bankruptcy or extenuating
26 circumstances. The Fund shall be reimbursed for any amounts
27 paid under this Section upon liquidation of the collateral.
28 The Authority, by resolution of the Board, may borrow
29 sums from the Fund and provide for repayment as soon as may
30 be practical upon receipt of payments of principal and
31 interest by a farmer or agribusiness on State Guarantee Loans
32 under this Section or Section 12.4. Money may be borrowed
33 from the Fund by the Authority for the sole purpose of paying
34 certain interest costs for farmers or agribusinesses
HB1880 Enrolled -10- LRB9003959MWksA
1 associated with selling a loan subject to a State Guarantee
2 under this Section or Section 12.4 in a secondary market as
3 may be deemed reasonable and necessary by the Authority.
4 (Source: P.A. 87-835; 87-1268; 88-571, eff. 8-11-94.)
5 (20 ILCS 3605/12.4) (from Ch. 5, par. 1212.4)
6 Sec. 12.4. Young Farmer Loan Guarantee Program.
7 (a) The Authority is authorized to issue State
8 Guarantees to lenders for loans to finance or refinance debts
9 of young farmers. For the purposes of this Section, a young
10 farmer is a resident of Illinois who is at least 18 years of
11 age and who is a principal operator of a farm or land, who
12 derives at least 50% of annual gross income from farming,
13 whose net worth is not less than $10,000 and whose debt to
14 asset ratio is not less than 40%. For the purposes of this
15 Section, debt to asset ratio means current outstanding
16 liabilities, including any debt to be financed or refinanced
17 under this Section, divided by current outstanding assets.
18 The Authority shall establish the maximum permissible debt to
19 asset ratio based on criteria established by the Authority.
20 Lenders shall apply for the State Guarantees on forms
21 provided by the Authority and certify that the application
22 and any other documents submitted are true and correct. The
23 lender or borrower, or both in combination, shall pay an
24 administrative fee as determined by the Authority. The
25 applicant shall be responsible for paying any fee or charge
26 involved in recording mortgages, releases, financing
27 statements, insurance for secondary market issues, and any
28 other similar fee or charge that the Authority may require.
29 The application shall at a minimum contain the young farmer's
30 name, address, present credit and financial information,
31 including cash flow statements, financial statements, balance
32 sheets, and any other information pertinent to the
33 application, and the collateral to be used to secure the
HB1880 Enrolled -11- LRB9003959MWksA
1 State Guarantee. In addition, the borrower must certify to
2 the Authority that, at the time the State Guarantee is
3 provided, the borrower will not be delinquent in the
4 repayment of any debt. The lender must agree to charge a
5 fixed or adjustable interest rate that the Authority
6 determines to be below the market rate of interest generally
7 available to the borrower. If both the lender and applicant
8 agree, the interest rate on the State guaranteed loan can be
9 converted to a fixed interest rate at any time during the
10 term of the loan.
11 State Guarantees provided under this Section (i) shall
12 not exceed $500,000 $300,000 per young farmer, (ii) shall be
13 set up on a payment schedule not to exceed 30 years, but
14 shall be no longer than 15 years in duration, and (iii) shall
15 be subject to an annual review and renewal by the lender and
16 the Authority. A young farmer may use this program more than
17 once provided the aggregate principal amount of State
18 Guarantees under this Section to that young farmer does not
19 exceed $500,000 $300,000. No State Guarantee shall be
20 revoked by the Authority without a 90 day notice, in writing,
21 to all parties.
22 (b) The Authority shall provide or renew a State
23 Guarantee to a lender if:
24 (i) The lender pays a fee equal to 25 basis points
25 on the loan to the Authority on an annual basis.
26 (ii) The application provides collateral acceptable
27 to the Authority that is at least equal to the State
28 Guarantee.
29 (iii) The lender assumes all responsibility and
30 costs for pursuing legal action on collecting any loan
31 that is delinquent or in default.
32 (iv) The lender is at risk for the first 15% of the
33 outstanding principal of the note for which the State
34 Guarantee is provided.
HB1880 Enrolled -12- LRB9003959MWksA
1 (c) The Illinois Farmer and Agribusiness Loan Guarantee
2 Fund may be used to secure State Guarantees issued under this
3 Section as provided in Section 12.2.
4 (Source: P.A. 88-571, eff. 8-11-94; 89-154, eff. 7-19-95.)
5 Section 99. Effective date. This Act takes effect upon
6 becoming law.