Illinois General Assembly - Full Text of Public Act 096-0897
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Public Act 096-0897


 

Public Act 0897 96TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 096-0897
 
SB3719 Enrolled LRB096 20392 RCE 36037 b

    AN ACT concerning government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Finance Authority Act is amended by
changing Sections 805-5, 805-15, 805-20, 830-5, 830-35,
830-45, and 830-50 and by adding Section 830-55 as follows:
 
    (20 ILCS 3501/805-5)
    Sec. 805-5. Findings and Declaration of Policy. It is
hereby found and declared that a continuing need exists to
maintain and develop the State's economy; that there are
significant barriers in the capital markets inhibiting the
issuance by the Authority of industrial revenue bonds, loans,
and State Guarantees to assist in financing industrial
projects, farmers, and agribusiness in the State, particularly
for smaller firms; and that the establishment of the Industrial
Revenue Bond Insurance Fund and the exercise by the Authority
of the powers granted in this Article will promote economic
development by widening the market for the Authority's revenue
bonds, loans, and State Guarantees.
(Source: P.A. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/805-15)
    Sec. 805-15. Industrial Project Insurance Fund. There is
created the Industrial Project Insurance Fund, hereafter
referred to in Sections 805-15 through 805-50 of this Act as
the "Fund". The Treasurer shall have custody of the Fund, which
shall be held outside of the State treasury, except that
custody may be transferred to and held by any bank, trust
company or other fiduciary with whom the Authority executes a
trust agreement as authorized by paragraph (h) of Section
805-20 of this Act. Any portion of the Fund against which a
charge has been made, shall be held for the benefit of the
holders of the loans or bonds insured under Section 805-20 of
this Act or the holders of State Guarantees under Article 830
of this Act. There shall be deposited in the Fund such amounts,
including but not limited to:
    (a) All receipts of bond and loan insurance premiums;
    (b) All proceeds of assets of whatever nature received by
the Authority as a result of default or delinquency with
respect to insured loans or bonds or State Guarantees with
respect to which payments from the Fund have been made,
including proceeds from the sale, disposal, lease or rental of
real or personal property which the Authority may receive under
the provisions of this Article but excluding the proceeds of
insurance hereunder;
    (c) All receipts from any applicable contract or agreement
entered into by the Authority under paragraph (b) of Section
805-20 of this Act;
    (d) Any State appropriations, transfers of appropriations,
or transfers of general obligation bond proceeds or other
monies made available to the Fund. Amounts in the Fund shall be
used in accordance with the provisions of this Article to
satisfy any valid insurance claim payable therefrom and may be
used for any other purpose determined by the Authority in
accordance with insurance contract or contracts with financial
institutions entered into pursuant to this Act, including
without limitation protecting the interest of the Authority in
industrial projects during periods of loan delinquency or upon
loan default through the purchase of industrial projects in
foreclosure proceedings or in lieu of foreclosure or through
any other means. Such amounts may also be used to pay
administrative costs and expenses reasonably allocable to the
activities in connection with the Fund and to pay taxes,
maintenance, insurance, security and any other costs and
expenses of bidding for, acquiring, owning, carrying and
disposing of industrial projects which were financed with the
proceeds of insured bonds or loans. In the case of a default in
payment with respect to any loan, mortgage or other agreement
so insured, the amount of the default shall immediately, and at
all times during the continuance of such default, and to the
extent provided in any applicable agreement, constitute a
charge on the Fund. Any amounts in the Fund not currently
needed to meet the obligations of the Fund may be invested as
provided by law in obligations designated by the Authority, and
all income from such investments shall become part of the Fund.
In making such investments, the Authority shall act with the
care, skill, diligence and prudence under the circumstances of
a prudent person acting in a like capacity in the conduct of an
enterprise of like character and with like aims. It shall
diversify such investments of the Authority so as to minimize
the risk of large losses, unless under the circumstances it is
clearly not prudent to do so. Amounts in the Fund may also be
used to satisfy State Guarantees under Article 830 of this Act.
(Source: P.A. 93-205, eff. 1-1-04; 94-91, eff. 7-1-05.)
 
    (20 ILCS 3501/805-20)
    Sec. 805-20. Powers and Duties; Industrial Project
Insurance Program. The Authority has the power:
    (a) To insure and make advance commitments to insure all or
any part of the payments required on the bonds issued or a loan
made to finance any environmental facility under the Illinois
Environmental Facilities Financing Act or for any industrial
project upon such terms and conditions as the Authority may
prescribe in accordance with this Article. The insurance
provided by the Authority shall be payable solely from the Fund
created by Section 805-15 and shall not constitute a debt or
pledge of the full faith and credit of the State, the
Authority, or any political subdivision thereof;
    (b) To enter into insurance contracts, letters of credit or
any other agreements or contracts with financial institutions
with respect to the Fund and any bonds or loans insured
thereunder. Any such agreement or contract may contain terms
and provisions necessary or desirable in connection with the
program, subject to the requirements established by this Act,
including without limitation terms and provisions relating to
loan documentation, review and approval procedures,
origination and servicing rights and responsibilities, default
conditions, procedures and obligations with respect to
insurance contracts made under this Act. The agreements or
contracts may be executed on an individual, group or master
contract basis with financial institutions;
    (c) To charge reasonable fees to defray the cost of
obtaining letters of credit or other similar documents, other
than insurance contracts under paragraph (b). Any such fees
shall be payable by such person, in such amounts and at such
times as the Authority shall determine, and the amount of the
fees need not be uniform among the various bonds or loans
insured;
    (d) To fix insurance premiums for the insurance of payments
under the provisions of this Article. Such premiums shall be
computed as determined by the Authority. Any premiums for the
insurance of loan payments under the provisions of this Act
shall be payable by such person, in such amounts and at such
times as the Authority shall determine, and the amount of the
premiums need not be uniform among the various bonds or loans
insured;
    (e) To establish application fees and prescribe
application, notification, contract and insurance forms, rules
and regulations it deems necessary or appropriate;
    (f) To make loans and to issue bonds secured by insurance
or other agreements authorized by paragraphs (a) and (b) of
this Section 805-20 and to issue bonds secured by loans that
are guaranteed by the federal government or agencies thereof;
    (g) To issue a single bond issue, or a series of bond
issues, for a group of industrial projects, a group of
corporations, or a group of business entities or any
combination thereof insured by insurance or backed by any other
agreement authorized by paragraphs (a) and (b) of this Section
or secured by loans that are guaranteed by the federal
government or agencies thereof;
    (h) To enter into trust agreements for the management of
the Fund created under Section 805-15 of this Act; and
    (i) To exercise such other powers as are necessary or
incidental to the powers granted in this Section and to the
issuance of State Guarantees under Article 830 of this Act
foregoing.
    (j) At the discretion of the Authority, to insure and make
advance commitments to insure, and issue State Guarantees for,
all or any part of the payments required on the bonds issued or
loans made to finance any agricultural facility, project,
farmer, producer, agribusiness, or program under Article 830 of
this Act upon such terms and conditions as the Authority may
prescribe in accordance with this Article. The insurance and
State Guarantees provided by the Authority may be payable from
the Fund created by Section 805-15 and is in addition to and
not in replacement of the Illinois Agricultural Loan Guarantee
Fund and the Illinois Farmer and Agribusiness Loan Guarantee
Fund created under Article 830 of this Act.
(Source: P.A. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/830-5)
    Sec. 830-5. The Authority shall have the following powers:
    (a) To loan its funds to one or more persons to be used by
such persons to pay the costs of acquiring, constructing,
reconstructing or improving Agricultural Facilities, soil or
water conservation projects or watershed areas, such loans to
be on such terms and conditions, and for such period of time,
and secured or evidenced by such mortgages, deeds of trust,
notes, debentures, bonds or other secured or unsecured
evidences of indebtedness of such persons as the Board may
determine;
    (b) To loan its funds to any agribusiness which operates or
will operate a facility located in Illinois for those purposes
permitted by rules and regulations issued pursuant to the
Internal Revenue Code of 1954, as amended, relating to the use
of moneys loaned from the proceeds from the issuance of
industrial development revenue bonds; such loans shall be on
terms and conditions, and for periods of time, and secured or
evidenced by mortgages, deeds of trust, notes, debentures,
bonds or other secured or unsecured evidences of indebtedness
of such agribusiness as the Board may require;
    (c) To purchase, or to make commitments to purchase, from
lenders notes, debentures, bonds or other evidences of
indebtedness secured by mortgages, deeds of trust, or security
devices, or unsecured, as the Authority may determine, or
portions thereof or participations therein, which notes,
bonds, or other evidences of indebtedness shall have been or
will be executed by the obligors thereon to obtain funds with
which to acquire, by purchase, construction, or otherwise,
reconstruct or improve Agricultural Facilities;
    (d) To contract with lenders or others for the origination
of or the servicing of the loans made by the Authority pursuant
to this Section or represented by the notes, bonds, or other
evidences of indebtedness which it has purchased pursuant to
this Section; provided that such servicing fees shall not
exceed one percent per annum of the principal amount
outstanding owed to the Authority; and
    (e) To enter into a State Guarantee with a lender or a
person holding a note and to sell or issue such State
Guarantees, bonds or evidences of indebtedness in a primary or
a secondary market and to make payment on a State Guarantee
from available sources, including but not limited to, the
Illinois Agricultural Loan Guarantee Fund and the Illinois
Farmer and Agribusiness Loan Guarantee Fund created under
Section 830-30 and Section 830-35, respectively, and the
Industrial Project Insurance Fund created under Article 805 of
this Act.
(Source: P.A. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/830-35)
    Sec. 830-35. 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 801-10 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 in this Act; 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 830-40 of this Act. The Authority is
authorized to transfer such amounts as are necessary to satisfy
claims 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
830-45, and 830-50, and 830-55. 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 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 on State Guarantee Loans under this
Section, Section 830-45, or Section 830-50, or Section 830-55,
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, Section
830-45, or Section 830-50, or Section 830-55 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
830-45, or Section 830-50, or Section 830-55 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 on State Guarantee Loans under this
Section, Section 830-45, or Section 830-50, or Section 830-55.
Money may be borrowed from the Fund by the Authority for the
sole purpose of paying certain interest costs for borrowers
associated with selling a loan subject to a State Guarantee
under this Section, Section 830-45, or Section 830-50, or
Section 830-55 in a secondary market as may be deemed
reasonable and necessary by the Authority.
    (d) Notwithstanding the provisions of this Section 830-35
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. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/830-45)
    Sec. 830-45. 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 830-45, 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 Agricultural Loan Guarantee Fund and the
Illinois Farmer and Agribusiness Loan Guarantee Fund may be
used to secure State Guarantees issued under this Section as
provided in Section 830-30 and Section 830-35, respectively.
    (d) Notwithstanding the provisions of this Section 830-45
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. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/830-50)
    Sec. 830-50. 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. For purposes of this Section, a
specialized livestock operation also includes livestock
operations using anaerobic digestors to generate electricity.
    (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 Agricultural Loan Guarantee Fund and the
Illinois Farmer and Agribusiness Loan Guarantee Fund may be
used to secure State Guarantees issued under this Section as
provided in Section 830-30 and Section 830-35, respectively.
    (f) Notwithstanding the provisions of this Section 830-50
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. 95-697, eff. 11-6-07.)
 
    (20 ILCS 3501/830-55 new)
    Sec. 830-55. Working Capital Loan Guarantee Program.
    (a) The Authority is authorized to issue State Guarantees
to lenders for loans to finance needed input costs related to
and in connection with planting and raising agricultural crops
and commodities in Illinois. Eligible input costs include, but
are not limited to, fertilizer, chemicals, feed, seed, fuel,
parts, and repairs. At the discretion of the Authority, the
farmer, producer, or agribusiness must be able to provide the
originating lender with a first lien on the proposed crop or
commodity to be raised and an assignment of Federal Crop
Insurance sufficient to secure the Working Capital Loan.
Additional collateral may be required as deemed necessary by
the lender and the Authority.
    For the purposes of this Section, an eligible farmer,
producer, or agribusiness 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, 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 830-55, 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 borrower'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 $250,000 per borrower, (ii) shall
be repaid annually, and (iii) shall be subject to an annual
review and renewal by the lender and the Authority. The State
Guarantee may be renewed annually, for a period not to exceed 3
total years per State Guarantee, if the borrower meets
financial criteria and other conditions, as established by the
Authority. A farmer or agribusiness may use this program more
than once provided the aggregate principal amount of State
Guarantees under this Section to that farmer or agribusiness
does not exceed $250,000 annually. No State Guarantee shall be
revoked by the Authority without a 90-day notice, in writing,
to all parties.
    (b) The Authority shall provide a State Guarantee to a
lender if:
        (i) The borrower pays to the Authority a fee equal to
    100 basis points on the loan.
        (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 Agricultural Loan Guarantee Fund and the
Illinois Farmer and Agribusiness Loan Guarantee Fund may be
used to secure State Guarantees issued under this Section as
provided in Section 830-30 and Section 830-35, respectively.
    (d) Notwithstanding the provisions of this Section 830-55
with respect to the borrowers and lenders who may obtain State
Guarantees, the Authority may promulgate rules establishing
the eligibility of borrowers 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.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 05/24/2010